JPY Weekly Review (Dec. 16 – 20)

The Japanese yen finishes a very quiet week as a net loser, mostly influenced by counter currency flows and global risk sentiment.

Japanese Headlines and Economic data

Monday:

• Japanese economy ends fourth quarter in stagnation: Flash Manufacturing PMI Dec. 48.8
• Early week positive global risk sentiment sinks the yen early, sparked by news that China’s factory, retail sectors shine as trade tensions thaw.

Tuesday:

• BOJ’s next move to dial back stimulus, most economists now say: Reuters poll

Wednesday:

• Japanese trade deficit widened from 0.05T to 0.06T JPY as expected
• Japan to trim annual govt bond issuance next fiscal year
• A bit of a broad move lower in the yen against the majors, possibly on a positive shift in global risk-on sentiment. There doesn’t seem to be a direct catalysts, but this could have stemmed from news of improving Asian business sentiment and China’s central bank adding more liquidity to ease monetary conditions.

Thursday: 

• Bank of Japan keeps policy steady, offers gloomier view on output

Friday:

• Japanese national core CPI up from 0.4% to 0.5% as expected
• Japan cabinet approves record $939 billion budget spending plan for fiscal year 2020/21