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Japanese yen bears won out the week as Japanese data disappointed on net and despite some positive commentary from the Bank of Japan.

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 manufacturers’ sentiment stabilises in Jan, services weaken – “The Reuters Tankan sentiment index for manufacturers rose to minus 1 from minus 9 in the previous month, while the service-sector index fell to minus 11 from minus 4 in December, according to the Dec. 24-Jan. 13 survey.”

Tuesday:

The Japanese yen fell early in the Asia session. There were no apparent catalysts for the move, so it was likely influenced by broad risk sentiment. The tone of the market seemed to have leaned positive for the session, possibly in anticipation of upcoming comments from the new Secretary of Treasury (and former Fed head) Janet Yellen and strong odds of commentary that more stimulus is one the way.

Thursday:

Bank of Japan monetary policy statement: upgrades next year’s growth forecast, kept policy unchanged

“As widely expected, the BOJ maintained its targets under yield curve control (YCC) at -0.1% for short-term interest rates and around 0% for 10-year bond yields.”

“In fresh quarterly projections, the BOJ upgraded next fiscal year’s growth forecast to a 3.9% expansion from a 3.6% gain seen three months ago based on hopes the government’s huge spending package will soften the blow from the pandemic.”

Japan’s exports post first annual gain in two years in December – “The Ministry of Finance data out on Thursday showed Japan’s exports rose 2.0% in December from a year earlier, slightly below a 2.4% increase expected by economists in a Reuters poll but up from a 4.2% decline in the previous month.”

Friday:

Japan Flash Manufacturing PMI: Rising COVID-19 cases extend private sector downturn

au Jibun Bank Japan Manufacturing PMI dips to 49.7 in January

au Jibun Bank Japan Services PMI fell to 45.7 in January