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U.S.-China trade tensions and global risk aversion kept the yen on top of the forex heap last week. Will this week’s catalysts change the tides for the safe haven?

CPI reports

  • BOJ’s core CPI – inflation excluding food and energy prices – came in at 0.3% in September, slower than the 0.4% growth seen in August
  • BOJ’s core CPI is scheduled on Nov 26, 5:00 am GMT
  • Tokyo’s annualized CPI – widely considered a leading indicator for the national reading – showed 0.5% growth in October
  • Analysts expect the figure, due on Nov 28, 11:30 pm GMT to improve to 0.6% in November
  • Kuroda recently hinted at even deeper negative rates “within limits” to achieve growth and inflation goals

Retail sales

  • Retail trading jumped by 7.1% in September, much faster than the 4.6% growth seen in August
  • JPY didn’t move much as traders were more interested in seeing post-sales tax hike figures
  • Traders see retail sales dropping by 3.8% in September as the sales tax increase weighs on consumer spending

Lower-tier data dump

  • Unemployment rate (Nov 28, 11:30 pm GMT) is expected to maintain its 2.4% reading in October even as job-to-applicant ratio is expected to slip from 1.57 to 1.56 for the month
  • Preliminary industrial production (Nov 28, 11:50 pm GMT) could show a 2.0% dip after rising by 1.7% in September
  • Annualized industrial production is expected to drop by 5.3% after a 1.3% increase in September
  • Household confidence (Nov 29, 5:00 am GMT) is seen at 37.0 after a 36.2 index reading in October

Market risk appetite

  • Not a lot of top-tier reports are scheduled from major economies this week, which could bring more attention to U.S.-China trade updates
  • All eyes will be on whether a “phase one” deal could be signed within the year, or whether the next set of tariffs worth around $156B due on December 15 could be delayed or watered down
  • Unless we see other catalysts, weak PMIs in the European region could also dictate the tone for the safe haven yen for the rest of the week

Technical snapshot

  • Bollinger Bands are hinting that JPY is overbought against CHF, and might be nearly oversold against NZD

  • CHF/JPY is bearish on both short and long-term SMAs
  • CAD/JPY would’ve also met the conditions if not for the 0.08% gain above the 5 SMA
  • GBP/JPY is bullish in the longer-term SMAs but bearish in the short-term SMAs. Watch out for retracements or a reversal!
  • USD/JPY could’ve been bullish across the board if it wasn’t 0.16% below its 200 SMA

Missed last week’s price action? Read JPY’s price recap for November 18 – 22!