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Japan won’t be printing top-tier reports this week. So what can move the safe-haven yen over the next couple of days? Here’s a list.

Consumer spending-related reports

While the U.S. and Japan are still ironing out details for a bilateral trade deal, market geeks will be paying attention to clues on how strong (or weak) domestic demand will be in case Japan gets caught in a trade war.

September’s household spending numbers, for example, will be printed today at 11:30 pm GMT while the average cash earnings for the same month will come out on November 7 at 12:00 am GMT.

These reports don’t usually cause sustained price reaction from the yen, but they might cause a wiggle or two if they print significantly strong or weak numbers.

Overall risk sentiment

As you can see below, yen bulls and bears are more interested in trading the yen as a safe haven these days.

This week we might see volatility from the U.S. mid-term elections. Keep close tabs on USD/JPY, as it could show the most reaction to the results.

And then there’s the demand for higher-yielding assets such as equities.

Don’t forget that the Fed is also scheduled to share its latest policies this week, and, clues pointing to the members’ hawkishness or a possible rate hike in December could dampen demand for equities boost demand for U.S. Treasuries instead.

Last Week’s Price Review

After flying high for four consecutive weeks, the yen was finally brought down to earth and is trailing behind all its peers (as of 8 am GMT).

Overlay of Inverted JPY Pairs & US10Y Bond Yield (Black Line): 1-Hour Forex Chart
Overlay of Inverted JPY Pairs & US10Y Bond Yield (Black Line): 1-Hour Forex Chart

As usual, yen pairs were taking lots of directional cues from bond yields. And since bond yields were trending higher, the yen was forced to endure bearish pressure.

The rise in global bond yields was due mainly to the prevalence of risk-taking this week, market analysts say.

Speaking of risk sentiment, the risk-friendly vibes this week also very likely dampened demand for the safe-haven yen.

A clear example of this is the decoupling between JPY pairs and bond yields on Thursday since bond yields fell because of disappointing U.S. data, market analyst sayHowever, the yen traded sideways on the majority of JPY pairs, likely because of the risk-friendly vibes.

As a side note, the BOJ announced its latest monetary policy decision this week, but the event was essentially a dud, likely because the BOJ didn’t really say or do anything new, aside from downgrading its growth and inflation forecasts.

However, the BOJ presser appears to have shielded the yen from rising bond yields and the risk-friendly vibes, probably because BOJ Shogun Kuroda said that the negative effect of the trade war between the U.S. and China “has been limited so far.”

Also, Kuroda tried to play down the downgraded inflation projections by saying that “There’s no change to [the BOJ’s] general view on the price outlook … The momentum [for hitting the 2% target] is sustained.”