The yen has continued to weaken this morning, thanks to yesterday's good economic data and US dollar strength. Yesterday, the Bank of Japan's tankan survey showed that manufacturing growth is at the highest level in a decade. As positive data out of Japan typically boosts risk sentiment (causing Japanese investors to park their funds offshore), the yen fell on the news. While there has been limited US dollar news in the past day, the currency continues to strengthen on positive momentum. We have adjusted our short-term outlook on the yen to bearish and USD/JPY to bullish.
USD/JPY is currently trading just below 113, having risen above 113 earlier this morning. EUR/JPY continues to trade flat, with the pair trading above 132.40 currently.
Looking at economic data this week, consumer confidence figures came in above the last reading (43.9 vs. 43.3 previous). On Thursday, we'll see data regarding Japanese investments in foreign bonds and stocks. Finally, foreign reserve data and leading indicators will be published on Friday.