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We saw a bit of wild price action for the yen this week, but it was mostly a round of positive risk sentiment this week as traders price in high hopes of more stimulus coming to help the global recovery.

Overlay of Inverted JPY Pairs: 1-Hour Forex Chart
Overlay of Inverted JPY Pairs: 1-Hour Forex Chart
JPY Weekly Performance from MarketMilk
JPY Weekly Performance from MarketMilk

Japanese Headlines and Economic data

Monday:

“Japanese Business activity decreases at slowest rate in
eight months”

BOJ’s Kuroda warns pandemic to keep economic uncertainty ‘very high’

Tuesday:

There was no catalysts from Japan on the session, but we saw the biggest moves of the week during the U.S. session and following Asia session after U.S. President Donald Trump halts Covid-19 relief aid talks until after election. We saw an immediate risk aversion move in the financial markets, benefitting safe have assets like the Japanese yen.

Wednesday:

The Japanese yen reversed its Tuesday gains quickly during the Asia trading session after U.S. President Donald Trump reversed on his call to end work on a stimulus package, calling for Congress to aid the U.S. airline industry.

BOJ Kuroda says digitalization key in dealing with ageing population

BOJ chief warns climate change among biggest challenges facing global economy

Thursday:

Japan posts $19.8B current account surplus in August

BOJ chief says Japan is on recovery track from pandemic pain

Japan’s Sept. economy watcher sentiment highest in over 2 yrs

Friday:

Japan’s household spending, real wages extend COVID-driven declines

Price action in the Japanese yen, and financial markets in general, from Wednesday through Friday was mostly dominated by developments and hopes of a new U.S. stimulus package. Traders seemed to have stayed positive that we’d see a deal soon, prompting positive risk sentiment and less of demand for safe haven assets like the Japanese yen.