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A lack of market-moving catalysts confined the yen in tight ranges last week. Will the BOJ’s event inspire one-directional trades?

Check out the potential catalysts that might affect the safe-haven’s prices this week:

BOJ’s statement (Dec 18, Asian session)

  • A month and a half ago the Bank of Japan (BOJ) made no changes to its interest rates, long-term bond yield targets, and its lending programs
  • The central bank also downgraded its growth and inflation estimates though it shared an upbeat outlook
  • JPY still strengthened at the time as markets were more worried about lockdowns in Europe and the U.S. elections
  • Analysts don’t see policy changes from the BOJ this week

Lower-tier economic releases

  • Tankan’s quarterly manufacturing index (Dec 13, 11:50 pm GMT) to improve from -27 to -17 in Q4
  • Tankan’s non-manufacturing index seen at -7 (from -12)
  • Final industrial production (Dec 14, 4:30 am GMT) to be revised from -9.0% to -3.2% in October
  • Trade surplus (Dec 11, 11:50 pm GMT) to clock in at 510B JPY (vs. 873B JPY in November with exports outpacing imports
  • Markit’s manufacturing index (Dec 16, 12:30 am GMT) to return to expansion (50.0) from 49.0 reading in December
  • National core CPI (Dec 17, 11:30 pm GMT) to print at -0.8% after 0.7% decline in October

Safe-haven demand

  • Broad market themes like vaccine updates, Brexit negotiations, lockdowns in the European region, and stimulus deals will continue to influence the yen’s intraweek trends
  • The Fed’s statement will affect USD/JPY’s prices and maybe take the other yen crosses along for the ride

Technical snapshot

  • Stochastic considers the yen “oversold” against the comdolls and the European currencies
  • USD/JPY is mostly in neutral territory on the daily time frame
  • JPY is approaching overbought status against GBP
JPY Forex Pairs Stochastic from MarketMilk
JPY Forex Pairs Stochastic from MarketMilk
  • SMAs reflect the yen’s short and long-term bearish demand against the comdolls
  • USD/JPY is still on bearish trends
  • JPY is seeing short-term bullish pressure against GBP, EUR, and CHF
JPY Forex Pairs SMAs from MarketMilk
JPY Forex Pairs SMAs from MarketMilk
  • The safe-haven yen was most volatile against the pound and the comdolls in the last seven days
JPY Forex Pairs Volatility from MarketMilk
JPY Forex Pairs Volatility from MarketMilk

Missed last week’s price action? Read JPY’s price recap for Dec. 7 – 11!