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The Japanese yen was a big loser this week as we saw more signals that the Bank of Japan may enact further stimulus as global economic uncertainties grow.

Overlay of Inverted JPY Pairs: 1-Hour Forex Chart
Overlay of Inverted JPY Pairs: 1-Hour Forex Chart

Japanese Headlines and Economic data

Monday:

Tuesday:

  • Early Asia session strength in yen pairs may have stemmed from a rise in global risk aversion sentiment as Middle East tensions continued to rise between the U.S. and Iran.
  • Bank of Japan core CPI at 0.7%
  • The Japanese yen started to take a turn to the downside during the afternoon U.S. session, most likely sparked by comments from Fed officials (Bullard calls for ‘insurance’ cut, Fed stronger case for accommodation) strengthening speculation of a rate cut very soon, even if it’s not likely the 50 bps cut investors were looking for. Global risk sentiment turned toward the positive which hurt “safe haven” assets, including the yen.

Thursday:

Friday: