The yen is slightly stronger this morning. While the yen is gaining against the US dollar, it has strengthened the most against the Australian dollar. As doubts regarding future inflation increase, global bond yields have been falling. Given the yen's sensitivity to interest rates, the currency is stronger as a result. As this week includes Core PCE figures in the US and Eurozone CPI numbers, the yen may break out of its bullish pattern if inflation numbers are stronger than expected. For now, our outlook remains bullish.
USD/JPY is currently trading just above 111.30. Looking at the euro vs. the yen, EUR/JPY is up and is currently trading above 132.80.
This is a fairly light week for economic data releases relating to the yen. On Wednesday, we'll see Large Retailer's Sales and Retail Trade. On Thursday, we'll get cross-border stock and bond investments. Finally on Friday we'll see National CPI, the unemployment rate and household spending. Last week, the trade balance missed estimates.
As the yen strengthens in relative terms against major currencies, we are upgrading the yen to bullish in the short-term. Note that the currency is looking overbought in the short-term, based on technical indicators on the daily chart.
As political developments overseas strengthen the yen, we are upgrading the yen to bullish. 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.