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
- The yen is on bullish trends against NZD, GBP, CAD, and EUR
- Watch for retracement or reversal opportunities on CHF/JPY and USD/JPY
- The yen was most volatile against NZD, AUD, GBP, and CAD in the last seven days
Missed last week’s price action? Read JPY’s price recap for May 11 – 15!
