Trade tensions between the U.S. & China brought on a round of risk aversion to the global markets this week, supporting the Japanese yen in the process despite net positive news and data from Japan.
Overlay of Inverted JPY Pairs: 1-Hour Forex Chart
JPY Weekly Performance from MarketMilk
Japanese Headlines and Economic data
Monday:
- After a slow start for the bulls, the Japanese yen popped higher during the U.S. trading session after reports of a pessimistic mood from Beijing on U.S.-China trade negotiations brought global risk sentiment down into negative territory.
Tuesday:
- BOJ can still deepen negative rates, within limits: Kuroda
- BOJ conducting research on digital currency: Kuroda
- Trump threatens higher tariffs if China doesn’t make a trade deal, lifting safe-haven assets like the Japanese yen during the U.S. trading session.
Wednesday:
- Safe haven assets (including the yen against the majors) reached their peak for the weak after reports that the Phase One U.S.-China trade deal may not be completed this year
Thursday:
- Japan’s ruling bloc calls for $92 billion fiscal package to support growth
- Indices of all industry activity in Japan improves from 0.0% to 1.5% in September
- BoJ’s stock-buying programme starts to sputter
- Global risk sentiment turned towards the positive to push the yen lower on the session, likely on a combination of China’s top negotiator sounded ‘cautiously optimistic’ about reaching trade deal and China inviting U.S. trade negotiators for new round of talks.
Friday:
- Japanese national core CPI y/y up 0.4% as expected, 0.3% previous
- Japanese flash manufacturing PMI up from 48.4 to 48.6 vs. 48.7 consensus
