Japanese yen traders once again put global risk sentiment over Japanese fundamentals, pushing the currency lower as geopolitics improved big time through the end of the week.
Japanese Headlines and Economic data
- Japan’s current account surplus rose 38% in October
- Japan upgrades third-quarter GDP as consumer, business strength absorbs hit from trade
- Japan November service sector mood recovers slightly from storm, tax hit
- Global risk sentiment starts to improve for the week on speculation that the U.S. and China are planning to delay the December tariffs, correlating with the slow grind lower in the yen against the majors.
- Big Japanese firms’ sentiment worsens to 3-yr low from Oct to Dec
- Japan producer prices up +0.2% in November
- Japan’s government expects tax revenue to undershoot by around 2.3T – 2.5T JPY in current FY
- BOJ’s Kuroda: Global economy showing bright signs
- BOJ deputy governor warns of risks, signals easy policy bias
- Japanese core machinery orders slipped 6.0% vs. projected 0.7% gain
- Big jump in positive global risk sentiment during the afternoon U.S. trading session to crush the yen after Trump Signs off on China trade deal to avert December tariffs. The big Conservative Party win in the U.K. general elections likely brought in some risk-on sentiment as Brexit uncertainty waned.
- Japan business sentiment logs longest drop since Lehman: BOJ Tankan
- Japan’s industrial production revised lower from -4.2% to -4.5% in October
- A little bit of pullback in global risk optimism as details of the newly formed U.S.-China trade agreement were a little bit disappointing (only 50% of the $112B in tariffs would be rolled back and China agreed to buy $32B in additional agricultural goods over the next two years, conflicting with Trump’s claims of $50B in agricultural purchases. A nice bump higher off of the news for the yen, but not enough to take it out of the red against any of the major currencies.