JPY Weekly Forecast – Impact of Abe’s Resignation Limited

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Another week, another chance to trade the safe haven!

Will the yen continue to strengthen on the back of PM Abe’s resignation?

Here’s what you need to know about JPY’s potential catalysts this week:

Lower-tier releases

Japan factory output up but retail sales down amid fragile recovery from pandemic
Consumer confidence (Aug 31, 5:00 am GMT) to dip from 29.5 to 29.0 in August
Housing starts (Aug 31, 5:00 am GMT) seen improving from -12.8% to -10.0% in July
Unemployment rate (Aug 31, 11:30 pm GMT) expected to inch higher from 2.8% to 3.1%

With Abe’s party still in charge of policymaking, markets don’t see his resignation affecting JPY’s trends for long
As seen in last week’s trading, headlines on COVID-19 vaccines and stimulus as well as the U.S.-China trade deal can continue to influence the demand for the safe-haven yen
PMIs from the major economies could tell the story of global economic recovery and influence JPY’s trends
Headlines about the U.S. NFP report can affect USD/JPY and lead most of the yen’s crosses

Stochastic considers the yen “oversold” against NZD, AUD, and GBP on the daily time frame
EUR/JPY, EUR/CHF, and USD/JPY remain mostly in the middle ground