It was a low volatility week for most currencies, including the Japanese yen as traders awaited a Brexit deal and a new U.S. stimulus package. The Japanese yen traded sideways with most pops of volatility influenced by the other major currencies and risk sentiment.
Japanese Headlines and Economic data
BOJ becomes biggest Japan stock owner with ¥45.1 trillion hoard – “NLI Research’s Ide says the BOJ “could face more scrutiny” over whether it needs to continue buying equities when prices are elevated like they are presently. BOJ Gov. Kuroda has repeatedly said that the ETF purchases are needed as part of monetary stimulus to reach the BOJ’s inflation target.”
Japanese average cash earnings slipped 0.8% y/y after earlier 1.3% slide
Japan’s household spending rebounded +1.9% vs. +2.7% forecast
Japan announced $708B in fresh stimulus for post-COVID growth – “The new package will include about 40 trillion yen ($384.54 billion) in direct fiscal spending and initiatives targeted at reducing carbon emissions and boosting adoption of digital technology.”
Japan’s July-September GDP growth upgraded to 22.9%, beating forecasts
Private consumption, which accounts for more than half of Japan’s GDP, soared 5.1%, revised upward from the 4.7% drop in the preliminary report released Nov. 16.
“We think GDP will rise by another 2.1% (quarter-to-quarter) in this quarter and surprise to the upside next year” – Tom Learmouth of Capital Economics
Japan’s October current account surplus grows 15.7% to ¥2.14 trillion – Goods trade registered a surplus of ¥971.1 billion
Japan economy watcher sentiment worsens for 1st time since April – “The diffusion index of sentiment among “economy watchers” such as taxi drivers and restaurant staff came to 45.6, down 8.9 points from October, according to a survey by the Cabinet Office.”
Japan’s October machinery orders rebound from previous month’s drop – “Core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, soared 17.1% in October, recouping the previous month’s 4.4% drop.”
Japan Manufacturing conditions Oct. – Dec. 2020(Corporations with +1B yen in capital): 21.6 vs. 0.1 previous quarter
Japan Producer Price index 0.0% m/m in November; -2.2% y/y