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Global risk sentiment was the main driver of the Japanese yen once again this week, this time pushing the safe haven higher on rising geopolitical uncertainty and a weakening economic outlook.

Japanese Headlines and Economic data
Monday:
- Japan’s first-quarter GDP grows at faster pace, but trade war blunts outlook
- Japan’s current account surplus in April shrank amid weak exports to China
- Kuroda says BOJ can deliver more stimulus: Bloomberg
- Net weakness to start the week, likely on a combination of the aforementioned catalysts above, and possibly on the decreased geopolitical uncertainty as the U.S. and Mexico came to a deal, and possibly on a better-than-expected Chinese trade data despite the trade war.
Tuesday:
- Global risk sentiment began to shift more negative starting on Tuesday as the latest developments in the U.S.-China trade story seemed to turn negative; Donald Trump says he’s personally holding up trade deal with China ahead of G20
Wednesday:
- Surprise gain in Japan’s machinery orders masks cooling investment outlook
- The Japanese Producer Price Index fell 0.1% from the previous month
Thursday:
- Japan Tertiary Industry Activity m/m 0.8% vs. -0.2% previous
- Broad yen rally with no apparent direct catalysts, but it is possible that the net weak Australian employment update that released around the same time could have added to the growing fear of an economic slowdown. Also, continued rising tensions in U.S.-China trade situation may be a contributor to risk-off sentiment.
Friday:
- One more boost higher in risk aversion behavior, likely on the oil tanker bombings in the Middle East, and possibly with help from another signal of a global economic slowdown from New Zealand as manufacturing data disappointed.