The yen is slightly weaker this morning after strengthening yesterday. The yen started the day stronger yesterday and continued to strengthen following news reports of another North Korean missile test. The yen has also been helped by volatility in Chinese financial markets and doubts regarding the upcoming Senate tax vote. Later today, future Federal Reserve Chair Jerome Powell is expected to speak at a confirmation hearing. Yen traders will be paying close attention to his remarks, especially if Powell deviates from the Fed's current monetary policies. Earlier indications suggest that his policies will largely mirror those established by Janet Yellen. Our outlook on the currency remains bullish.
USD/JPY is currently trading just above 111.20. Looking at the euro vs. the yen, EUR/JPY is down and is currently trading above 132.30.
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 trading within normal conditions, 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.