The Japanese yen sees red once again this week as global risk sentiment started off positive and Japanese economic updates continue to paint a picture of weakness ahead.
Japanese Headlines and Economic data
Monday:
- No Japanese related catalysts to explain the yen’s slow start to the week, so it’s likely global risk sentiment influenced the pair lower. Trader’s seemed to be in risk taking mode early on positive U.S.-China trade headlines (China to raise penalties on IP theft in trade war compromise and China and U.S. ‘very close’ to phase one trade deal).
Tuesday:
- BOJ Japanese core CPI y/y unchanged at 0.3% vs. projected uptick to 0.4%
- Japan Services PPI rose 2.1% y/y
- There’s seems to be a correlation with the yen’s Asia session rally and the optimistic inflation data, but that was short-lived as geopolitical influences continued to put pressure on safe haven assets.
Wednesday:
Thursday:
- Japanese retail sales slumped 7.1% vs. projected 3.8% drop
- BOJ’s Kuroda offers endorsement to more fiscal spending
- The pop higher in the yen during the Asia session was likely a reaction to headlines of Trump signing Hong Kong bills, sparking promises of retaliatory actions from China; a situation that likely lowered the odds of a trade deal happening and more uncertainty for the markets.
Friday:
- Japan’s factory output posts largest fall in almost two years
- Japan’s jobless rate remains at 2.4% in Oct amid labor crunch
- Tokyo core CPI rises 0.6% from a year ago in November
- BOJ’s Kuroda says no need to ease further now, warns against fiscal complacency
- Japan’s consumer confidence up 2.5 points from the previous month in November
- Japan’s housing starts dips by 7.4% (y/y) in October
- Global risk aversion sentiment is likely once again the main driver for the broad rally in the yen during the U.S. session after China threatens to take ‘strong counter-measures’ against US after Hong Kong bill signings
