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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 Forex Pairs Stochastic from MarketMilk
JPY Forex Pairs Stochastic from MarketMilk
  • 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
JPY Forex Pairs SMA from MarketMilk
JPY Forex Pairs SMA from MarketMilk
  • The yen saw the most volatility against the comdolls and the pound in the last seven days
JPY Forex Pairs Volatility from MarketMilk
JPY Forex Pairs Volatility from MarketMilk