A slow and steady stream of risk appetite put pressure on the yen this week.
Which market themes can influence the safe haven this time?
I’ve got a short list!
Lower-tier domestic releases
- Average cash earnings (July 6, 11:30 pm GMT) seen at -0.5% after -0.6% print in April
- Household spending (July 6, 11:30 pm GMT) could improve from -6.2% to 1.6% in May
- Core machinery orders (July 8, 11:40 pm GMT) only seen dipping by 5.5% in May after 12.0% drop in April
- Preliminary machine tool orders (July 9, 6:00 am GMT) to print at -43.0% in June (from -52.8% in May)
Overall risk sentiment
- Coronavirus cases, stimulus, vaccines, and reopening headlines will continue to affect the demand for safe havens like the yen
- Updates on trade tensions between the U.S. and China, or the U.S. and the eurozone can also affect market risk appetite
- China’s CPI and PPI reports (July 9, Asian session) can hint at the pace of post-pandemic recovery
Technical snapshot
- Stochastic considers the yen “oversold” against AUD, CHF, and NZD
- It’s on neutral territory against the other European currencies
- It’s also almost oversold against the Loonie
- JPY remains bearish against most of its major counterparts
- The yen is still above the 200 SMAs against GBP, CAD, and USD, though, so you may want to watch out for potential retracements or reversals
- The yen saw the most volatility against the comdolls and the pound in the last seven days
