It was a rough time for Japanese yen bulls as the bears took it lower early in the week and was unable to recover. Dovish commentary from Bank of Japan officials and weak economic updates were the likely culprits for the yen’s under performance.
Japanese Headlines and Economic data
No catalysts to be seen from Japan, but the Japanese yen fell across the board during the Monday session. Broad global risk sentiment was negative during the Asia session (rising coronavirus headlines were the likely driver), so that was a bit of a head scratcher. But risk sentiment switched to positive during the U.S. session, likely lifted by the bullish moves from US tech stocks, to possibly contribute to the yen’s weakness.
We saw Asia session volatility thanks to comments from Peter Navarro that the China deal was “over”, comments that he later walked backed. During the U.S. session, we somewhat of a broad move higher in the Japanese yen on no apparent catalyst, which was soon followed by a pullback as traders went with the positive risk vibes (driven again by U.S. tech sector strength).
Mixed performance from the yen, but a net winner on the session, likely on risk sentiment moving negative. Traders likely ran for safety as news of rising covid cases, negative global economic outlook, and geopolitical tensions (U.S. is considering $3.1 billion in new tariffs on products from France, Germany, Spain and the UK) came out through the day.
The Japanese yen bounced back against the majors during the Friday session, likely on the continued focus on coronavirus cases and states moving back into lockdown mode. The behavior was a little bit off from the norm as the yen fell against the other safe havens, likely an influence from earlier dovish commentary from BOJ Gov. Kuroda mentioned above.