It was a choppy and relatively low volatility week for the Japanese yen, with most intra-week moves mainly driven by counter currency moves, especially the U.S. dollar.
Overlay of Inverted JPY Pairs: 1-Hour Forex Chart
Japanese Headlines and Economic data
Monday:
- Japanese bank lending falls to 2.3% y/y
- Japan May core machinery orders fall 7.8% m/m
- Japan posts current account surplus of 1.59tn yen in May
- BOJ’s Kuroda says moderate economic expansion to continue
- BOJ warns of trade war impact on regional Japan, keeps assessment intact
Tuesday:
- Japan Real Wages Fall for a Fifth Straight Month in May
- Japan M2 money supply increase by 2.3% vs. 2.6% previous
Wednesday:
- Japan producer prices fall 0.1%
- Broad bullish move in the yen from the Wednesday U.S. session into the Thursday morning Asia session. This is possibly on rising geopolitical tensions as Iranian boats tried to intercept a British tanker, just a few days after Britain captures an Iranian oil tanker.
Thursday:
- Indices of Tertiary Industry Activity falls -0.2% to 106.8 – the Japanese yen moves steadily lower around this data release, also likely on the rising global risk-on sentiment sparked by Federal Reserve Chairman Powell’s testimony that basically solidified in trader’s minds that a rate cut was coming at the end of July.
Friday:
- The yen broadly moved higher starting in the European session and into the U.S. trading session without an apparent direct catalyst. Arguably, this is off of a continued U.S. dollar weakness move as USD/JPY dragged other yen pairs lower on the session, likely on the heavily speculated Fed “insurance” rate cut still being priced in.
