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Market geeks believe that the BOJ won’t be changing its policies this week. However, the central bank could tweak some of its forecasts.

Which potential catalysts can influence the yen’s trends this week?

Take a look at the list below if you’re planning on trading the safe haven in the next couple of days:

BOJ’s policy announcement (Oct 29, Asian session)

  • The Bank of Japan (BOJ) is still in a wait and see mode, so it will likely keep its policies steady and pledge to keep its programs accommodative in the foreseeable future
  • Analysts will pay close attention to BOJ’s forecasts, which is expected to reflect downgrades in price and growth estimates after a softer-than-expected economic activity in Q2 2020
  • Governor Kuroda is expected to hold a presser later in the day

Lower-tier economic releases

  • These reports don’t usually affect the yen’s prices for long, but they can cause intraday fluctuations that can translate to short-term trading opportunities
  • BOJ’s core CPI (Oct 27, 5:00 am GMT) has stagnated for a second time in August
  • Retail sales (Oct 28, 11:50 pm GMT) could weaken from 4.6% to 1.5% in September and print a 6.0% annual decline after a 1.9% dip in August
  • Consumer confidence (Oct 29, 5:00 am GMT) seen improving from 32.7 to 34.8 in October
  • Tokyo’s core CPI (Oct 29, 11:30 pm GMT) could inch higher from 0.2% to 0.3% in October
  • Unemployment rate (Oct 29, 11:30 pm GMT) to dip from 3.0% to 2.9% in September?
  • Preliminary industrial production (Oct 29, 11:50 pm GMT) could slow down from 1.0% to 0.5% in September

Market risk sentiment

  • As a safe haven, traders could flock to the yen in times of risk aversion
  • The possibility of a contested U.S. Presidential election could weigh on USD/JPY and take some of the yen crosses along with it
  • Pandemic updates (lockdown, stimulus, and vaccine prospects) will continue to influence the yen’s intraweek trends
  • Top-tier events like the Bank of Canada (BOC) and European Central Bank (ECB’s) policy decisions; U.S. GDP, and the Communist Party of China’s big meeting can also affect the appetite for the yen

Technical snapshot

  • Stochastic considers the yen as “overbought” against the Aussie
  • JPY is also fast approaching “overbought” status against the dollar on the daily time frame
  • The yen remains near the neutral zone against the Loonie, euro, Kiwi, and franc
JPY Forex Pairs Stochastic from MarketMilk
JPY Forex Pairs Stochastic from MarketMilk
  • SMAs show that the yen is still trading below the 200 SMA against most of its major counterparts
  • JPY is on short and long-term bearish trends against NZD and CHF
JPY Forex Pairs SMAs from MarketMilk
JPY Forex Pairs SMAs from MarketMilk
  • The safe-haven was most volatile against The comdolls and the euro in the last seven days
JPY Forex Pairs Volatility from MarketMilk
JPY Forex Pairs Volatility from MarketMilk