The Japanese yen is weaker against all major currencies except the Australian dollar today. While the yen remains in a bullish trend (and is more likely to strengthen), day-to-day movements in the currency have been erratic. After moving into oversold territory last week (particularly against commodity currencies), the currency is now rebounding despite waning risk sentiment. Other safe haven assets including government bonds and the US dollar are currently strengthening, suggesting limited demand for riskier investments. While the yen is weakening today, we expect the yen to resume strengthening given slowing global growth and rising political risks. Our short-term and medium-term outlook on the yen remains bullish.
USD/JPY is currently trading above 105.50. EUR/JPY is currently up slightly and trading above 130.850.
Turning to Japanese economic data, this is a relatively light week. On Thursday, we'll see retail sales figures for February and cross-border stock and bond investments. On Friday, we'll see the consumer price index for Tokyo, industrial production and the unemployment rate. Last week, national CPI met expectations.