Tough week for Japanese yen bulls thanks to the one-two punch of a dovish BOJ statement and rising positive global risk sentiment.
Japanese Headlines and Economic data
- Japan Services Producer Prices: +0.5% vs. +0.5% previous
- Negative start to the week, likely on positive global risk sentiment after China Says Part of Phase 1 Trade Deal Text ‘Basically Completed’
- BOJ keeps policy steady but adopts new forward guidance on rates – Broad sell-off in Japanese yen pairs after the BOJ pledges to maintain ultra-low interest rates, a policy that was voted on 8-1 in favor of.
- Japan Housing Starts decreased by -4.9% in September vs. a -7.1% decrease in August
- Japan’s Consumer Confidence Index (seasonally adjusted) was up 0.6 points in October 2019 to 36.2
- Japan’s September industrial output rises 1.4% on month
- Global risk aversion sentiment rises before the U.S. trading session to lift the Japanese yen after reports that China believes that a long-term trade deal with Trump is in doubt.
- Japan’s Sept. jobless rate edges up from near three-decade low
- Japan PMI falls to 40-month low amid strong deterioration in demand
- On top of the weak Japanese unemployment and manufacturing sentiment data, pressure on the yen may have stemmed from rising risk-on sentiment after a positive Chinese manufacturing PMI update (51.7 in October vs. 51.4 previous)