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Japanese yen mostly weaker as traders brush off US-China tensions

Japanese yen daily update


Japanese yen daily update

The Japanese yen is currently weakening against all major currencies except the Australian dollar and the Canadian dollar. Last week, the yen continued to weaken against the US dollar. Trading volumes in Japanese yen futures decelerated week-over-week, albeit to a fairly small degree. Today's USD/JPY trading range is 110.10 - 112.90. USD/JPY continues to be overbought (i.e. the yen is oversold). 

Looking at recent price action, the yen moved up sharply earlier today. Over the weekend, the Wall Street Journal reported that China had canceled its upcoming trade discussions with the United States. As a safe haven currency, the yen tends to rally in response to rising risks. Following the initial move, the yen has now given up all of its gains. Looking at AUD/JPY (one of the biggest losers earlier today), the pair is currently trading just below its recent highs. Note that today is a public holiday in Japan and Mainland China, and trading volumes in the yen are fairly limited as a result. 

Looking at this week's economic calendar, there are a range of upcoming figures including retail sales growth and unemployment. Traders will also be watching the latest communications from the Bank of Japan. While the BoJ has publicly committed to its current monetary policy, there is an ongoing concern that the Bank if conducting 'stealth tapering' by reducing the size of its quantitative easing program. Any hint that the BoJ is seriously considering curtailing its monetary policy program is likely to send the yen higher. For now, our outlook on the yen remains bearish. 

USD/JPY is currently trading above 112.60. EUR/JPY is up slightly, and trading above 132.60. GBP/JPY is up, and trading above 147.80.

Date Event Actual Previous
September 25 BoJ Monetary Policy Meeting Minutes
September 25 Leading Economic Index Final JUL 104.6
September 25 BoJ Kuroda Speech
September 26 BoJ Kuroda Speech
September 28 Tokyo CPI YoY SEP 1.2%
September 28 Tokyo Core CPI YoY SEP 0.9%
September 28 Unemployment Rate AUG 2.5%
September 28 BoJ Summary of Opinions
September 28 Foreign Bond Investment 22/SEP ¥2312B
September 28 Stock Investment by Foreigners 22/SEP ¥-1481.7B
September 28 Industrial Production YoY Prel AUG 2.3%
September 28 Retail Sales YoY AUG 1.5%
September 28 Housing Starts YoY AUG -0.7%

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