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Rough week for the Japanese yen thanks to a round of global risk-on sentiment on top of more updates from Japan signaling a severe economic situation ahead.

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:

Japan minister warns against complacency over coronavirus in areas still under emergency
Japan’s GDP shrinks at 3.4% pace in January-March
Japan in technical recession and worse is to come


Japan Teritiary Industry activity falls -4.2% m/m
Global risk sentiment started the week in the “on” position to help sink the yen early, thanks to several catalysts: Moderna reports positive data on early-stage coronavirus vaccine trial, weekend comments from Fed Chair Powell to reiterate unlimited stimulus support, positive signs of the global economy returning to pre-covid levels.

Tuesday:

Japan revised industrial production: -3.7% m/m
Japan’s economic conditions likely to stay tough in current quarter, finance minister says
BOJ’s emergency meeting to decide loan scheme for virus-hit small firms
Another tough session for the yen thanks to Monday’s driving themes, but we did see a little bounce in the yen as risk sentiment shifted negative during the U.S. session on Moderna vaccine news and more U.S.-China tensions (US could delist Chinese companies).

Wednesday:

Japanese core machinery orders down by 0.4% vs. expected 6.8% slide
Pandemic sinks Japan business mood to decade low, outlook even bleaker: Reuters Tankan
Japan’s LDP advocates stimulus, with funding for firms to survive COVID-19 recession

Thursday:

Recession-hit Japan’s exports, imports fall due to pandemic
PMIs show that “severe” economic downturn continues in Japan
Japan’s May factory activity reels as pandemic hits output, orders
Another buying bouncing in the yen during the U.S. trading session as risk sentiment moves negative on more U.S.-China tensions (White House report criticizes China’s economic policies, human rights violations) and weak U.S. economic updates (U.S. jobless claims total 2.4M)

Friday:

Bank of Japan Monetary policy meeting: BOJ holds interest rate at -0.10% and shares details on loan scheme to boost business lending, sets aside 75 trillion JPY for another COVID-19 loan program
Japanese national core CPI down 0.2% vs. expected 0.1% decline
The yen continued its rally during the Asia session as risk sentiment continued in negative mode, once again U.S.-China tensions (China Will Fight Back if U.S. Intervenes in Hong Kong, Beijing Warns)