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After spending most of week in the green, the Japanese yen took a turn for the worse on Friday thanks to comments from Japanese officials sparking intervention speculation.

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:

Bank of Japan Core CPI: +0.1% m/m in June vs. 0.0% in May

Pandemic hit to Japan’s first-quarter business spending worse than first thought

Tuesday:

Japans services producer prices index grew 0.8% y/y in June, following 0.5% increase in May

We saw a bit of a uniform rally in the yen during the U.S. trading session, possibly on risk aversion sentiment sparked by the fall in the big U.S. tech companies and record COVID-19 related deaths across several U.S. states.

Wednesday:

Bank of Japan speeds up work toward issuing digital currency

BOJ won’t rule out deeper negative rates to combat pandemic hit: deputy governor Amamiya

Thursday:

Japan’s June retail sales fall for 4th month but at slower pace

Despite the weak retail sales data, the yen rallied during the late Asia session.  There doesn’t seem to be a direct catalyst, so it’s possibly a risk sentiment reaction to a round of negative economic updates from New Zealand (ANZ business outlook shows bounce vs June but bounce appears to be running out of steam) and Australia (AU June building dwelling approvals slide to eight-year low).

Friday:

Bank of Japan was fearful of eurozone crisis spillover, minutes show

Japan’s jobless rate improved from 2.9% to 2.8%

Japanese consumer confidence index improved from 28.4 to 29.5

Japan finance minister Aso warns against ‘rapid’ yen rises – this commentary sparked speculation that the government and central bank will likely take any steps necessary to devalue their currency like direct market intervention.

Japan Housing starts decreased 12.8% y/y in June, following a 12.3% fall in May