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After a topsy-turvy ride last week, can yen bulls and bears find settle on a direction this week?

Let’s take a look at events that might affect the low-yielding currency:

Trade balance (Nov 19, 11:50 pm GMT)

  • Japan posted a 123B JPY deficit in September, lower than the expected 54M JPY surplus
  • Exports fell 5.2% from a year ago, its third consecutive decrease
  • Imports also slipped by 1.5%, its fifth consecutive drop
  • Traders are seeing a 359B JPY surplus for the month of October

National core CPI (Nov 21, 11:30 pm GMT)

  • Core consumer prices eased to 0.3%, the lowest since April 2017, after rising by 0.5% from a year ago in August
  • The yen lost pips across the board at the news, but soon recovered as the report raised stimulus expectations from the BOJ
  • Analysts expect to see 0.4% growth for the month of October

Overall market sentiment

  • Meeting minutes from the RBA, ECB, and the Fed might give hints on the direction of monetary policy in the foreseeable future
  • Markets expect the PBoC to lower its new loan prime rate (LPR) on Wednesday after unexpectedly injecting liquidity last Friday
  • Chinese Vice Premier Liu He reportedly held a phone conversation with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin over the weekend. Eyes will be on whether the Trump admin can pull back some of its tariffs enough to secure a “phase one” deal before the December 15 tariffs kick in.

Technical Snapshot

  • USD/JPY, CHF/JPY, NZD/JPY, and GBP/JPY are all bullish in the short term
JPY Short Term SMAs from MarketMilk™
JPY Short Term SMAs from MarketMilk™
  • But only USD/JPY and NZD/JPY are also on “bearish but weakening” on the longer time frames. Watch both pairs closely for retracement or reversal opportunities!
JPY Long Term SMAs from MarketMilk™
JPY Long Term SMAs from MarketMilk™