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Japanese yen price action settled down after a volatile start to the week on geopolitical headlines shaking up risk sentiment. In the end, yen bulls turned out to be net winners, possibly on mixed but net positive economic updates before the end of the week.
Japanese Headlines and Economic data
Monday:
- Trump says US and China to resume trade talks – this was the catalyst for the big market sentiment turn around just before the European session open. Yen pairs fell on the news that “China called the U.S.” to restart trade talks, even after Chinese media debunked the idea that China called the U.S. over the weekend.
Tuesday:
Wednesday:
Thursday:
- BOJ policymaker sees danger from more easing, in signal of wider board rift
- Broad mover lower in the yen against the major currencies during the morning London session, possibly on the news that China won’t retaliate to new U.S. tariffs and their rhetoric on resolving the trade dispute with a ‘calm attitude.’ It show China isn’t looking to escalate the trade war further which calmed down traders into lightening up on safe haven bets.
Friday:
- Tokyo Aug core CPI rises 0.7% yr/yr
- Japan’s unemployment rate drops to 2.2% in July
- Japan factory output rebounds, but retail sales slow in worrying sign for outlook
- Japan Housing starts fall -4.1% y/y
- The Japanese yen began its turn higher right around the release of the mixed Japanese economic updates, which were arguably net positive as the jobs, industrial and inflation numbers likely overshadowed the retail sales and housing data.