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Japanese yen slightly higher as geopolitical risks fade

Japanese yen daily update

BY DEB SHAW | 

Japanese yen daily update

The Japanese yen is slightly higher today - the yen is currently making gains against all major currencies. The yen is the strongest against the Canadian dollar and the Australian dollar. Last week, the yen weakened despite rising fears of US military action in Syria. After the currency looked overbought in late March, the yen has been weakening since that time. 

Turning to recent news, a Nippon TV poll last weekend suggests that support for Prime Minister Shinzo Abe has declined to 26.7 percent. This is the lowest figure recorded since Abe came to power in December 2012. While Abe's resignation is looking more likely, reactions in the yen have been fairly limited. Looking at other markets, Hong Kong's Hang Seng Index and the Shanghai Composite are undergoing significant sell-offs today. Historically, fears of financial stability in China has resulted in yen strength. For now, the yen remains fairly stable while the Nikkei 225 is slightly higher. Our short-term outlook on the yen is neutral, while our medium-term outlook on the yen remains bullish.  

USD/JPY is currently trading above 107.20. EUR/JPY is currently down and trading above 132.280.

Looking at Japanese economic data this week, important data releases include the trade balance and inflation figures. Tomorrow, we’ll see YoY industrial production and capacity utilization for February. On Wednesday, we’ll see the adjusted trade balance for March. On Thursday, we’ll see foreign investment in Japanese equities and Japanese investment in foreign bonds. On Friday, the most important day, we’ll see the YoY national consumer price index for March. Last week, the Eco-Watcher Survey results were below consensus expectations. 

Updated 
Short term outlook
Bearish
Medium term outlook
Bearish

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