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Risk sentiment dictated the yen’s price action last week.

Can this week’s set of economic releases change the tides for the safe haven?

Here’s a list of potential catalysts you need to pay attention to:

Closely watched economic reports

  • Preliminary GDP data showed a 0.9% dip in Q1 2020, better than the 1.8% drop in Q4 2019 and the expected 1.1% decrease
  • Industrial production (May 19, 4:30 am GMT) to maintain its -3.7% initial reading?
  • Core machinery orders (May 19, 11:50 pm GMT) could drop from +2.3% to -6.8% in March
  • Trade data (May 20, 11:50 pm GMT) could show both exports and imports doubling their monthly decline in April
  • Markit’s manufacturing PMI (May 21, 12:30 am GMT) printed at 41.9 in April, lower than 44.8 in March

Market risk appetite

  • Escalating concerns on the U.S.-China trade war can continue to support the yen against higher-yielding currencies
  • PMI reports from other major economies (U.S., U.K., Euro Zone, and Australia) are expected to mirror China’s “recovery” after easing lockdown restrictions
  • Powell’s views on policy options and economic forecasts can affect risk taking in the markets
  • More news on reopening economies and concerns over a “second wave” of infections can affect demand for the safe haven yen

Technical snapshot

  • Stochastic thinks JPY is “overbought” against NZD and GBP on the daily time frame
JPY Forex Pairs Stochastic from MarketMilk
JPY Forex Pairs Stochastic from MarketMilk
  • The yen is on bullish trends against NZD, GBP, CAD, and EUR
  • Watch for retracement or reversal opportunities on CHF/JPY and USD/JPY
JPY Forex Pairs SMAs from MarketMilk
JPY Forex Pairs SMAs from MarketMilk
  • The yen was most volatile against NZD, AUD, GBP, and CAD in the last seven days
JPY Forex Pairs Volatility from MarketMilk
JPY Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read JPY’s price recap for May 11 – 15!