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The yen was once again a net loser on the week, thanks to positive global risk sentiment and possibly on some not-so-stellar Japanese economic data.

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

Major Market Drivers for the Japanese Yen

Since Japanese economic data was light on top tier events and we saw no major headlines from Japan this week, price action in the Japanese yen was once again driven mainly by global risk sentiment and bond yields.

Global risk sentiment was pretty much on the upswing this week, which can arguably be attributed to several themes playing out:

From Japan, the weak PPI and industrial production reads could be argued as a contributor towards yen weakness, but again there doesn’t appear to be any direct price action reaction to these events. If anything, though, they do support the argument that the economic outlook is weak enough to keep the expectations of the Bank of Japan to refrain from tightening policy in 2019, which is likely to prevent some support for the yen coming any time soon.

Overall, from a macro point of view, traders had little reason to seek safe haven assets this week, obvious by the apparent under performance of the yen versus the other major currencies and the rise in U.S. 10-year Treasury bond yields, and price correlation seemed pretty consistent between yen pairs for most of the week.

Japanese Headlines and Economic data