JPY Daily Updates

12 March 2018

The Japanese yen is mostly higher today after selling off last week on hopes for a North Korean peace deal. Looking at the yen against major peers, the currency is currently the strongest against the US dollar and the Canadian dollar. Turning to recent news, the name of Japanese Prime Minister Abe's wife (Akie) was allegedly removed from documents relating to a sale of government-owned land. Akie has been accused of cronyism, after she bought state-owned land at a deep discount relative to fair market value. Abe has denied the allegations, and has offered to resign if found guilty of cronyism. The latest development was uncovered after Japan's finance ministry reported the development to the Liberal Democratic Party according to Kyodo News. Japan's Nikkei 225 fell following the announcement, while the yen strengthened. As a safe haven currency, the yen tends to strengthen as a response to rising political risks. Our short-term and medium-term outlook on the yen remains bullish.   

USD/JPY is currently trading above 106.50. EUR/JPY is currently down slightly and trading above 131.370.

Looking at Japanese economic data this week, we'll see the BoJ's minutes and machinery orders. On Tuesday, we'll get the tertiary industry index. On Wednesday, the most important day, we'll get the BoJ's meeting minutes and machinery orders for January. On Thursday, we'll see cross-border stock and bond flows. On Friday, we'll see industrial production and capacity utilization. Last week, sentiment surveys pointed to decelerating growth while the Bank of Japan maintained the status quo. 


As the yen strengthens, we are upgrading the yen to neutral. Looking at the yen on a weekly chart, the currency is trading within normal conditions. This is based on various technical indicators when looking at a weekly chart.