The Japanese yen took an early but small lead against the majors this week and held it all the way through the weekend in what was a mostly quiet week of across the major currencies.
Japanese Headlines and Economic data
Monday:
Japan’s economy shrinks at record rate, slammed by pandemic; -7.8% q/q vs. -0.6% previous
Japan Revised Industrial production for June: 1.9% m/m vs. 2.7% forecast
Japan calls for G7 coordination to spur global growth, combat pandemic, finance minister Aso says
Broad move higher for the Japanese yen despite the disappointing economic updates mentioned above. There weren’t major global headlines to start the week, but traders may have been leaning net negative on broad risk sentiment on rising virus cases and U.S-China tensions.
Tuesday:
Reuters Tankan Index: Pandemic woes continue to hurt Japan business mood in August
Wednesday:
Japan July exports fall 19.2% year/year – MOF
Japan’s core machinery orders fall 7.6% in June
The yen rallied against the majors during the Wednesday U.S. session (with exception to the U.S. dollar), correlating with the release of the FOMC meeting minutes. They showed an unexpected dovish tone on expectations that coronavirus will ‘weigh heavily’ on the economy, sparking the broad risk aversion sentiment that followed.
Friday:
au Jibun Bank Japanese Manufacturing Purchasing Managers’ Index rose form 45.2 in July to 46.6
The broad move higher in the Japanese yen against the majors during the morning London session, likely sparked by the broad risk aversion sentiment set off by the disappointing European manufacturing and service PMI updates, as well as rising uncertainty with Brexit negotiations (EU, Britain trade blame after scant progress towards post-Brexit deal)
