The Japanese yen is again weaker today - the yen is currently the weakest against the Australian dollar, the Canadian dollar and the British pound. Yesterday, the currency weakened as risk sentiment rebounded. After Trump tweeted he "never said when an attack on Syria would take place," safe haven currencies such as the yen weakened as traders bought riskier assets such as US equities.
Today, the significant move down in the yen is out of sync with other asset classes. While equities and commodities are mostly lower, foreign exchange traders are chasing risk. This explains why the biggest moves today are happening in AUD/JPY (a good barometer of risk appetite), which is up by almost 1%. As we wrote in our US dollar daily update, reactions to Trump's latest moves on tariffs against China have been limited in foreign exchange markets (so far). Turning to news, there are no new updates regarding the Moritomo school scandal today. 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 107.60. EUR/JPY is currently up and trading above 132.80.
Looking at Japanese economic data this week, traders will be watching sentiment and machinery orders. The current account for February was slightly below expectations (¥2,076.0b vs. ¥2,160.0b expected). The Eco-Watchers survey (outlook) for March was also below expectations (49.6 vs. 51.5 expected). Machinery orders for March (2.4% vs 0% expected) was ahead of consensus estimates but decelerated from previous figures. Cross-border stock (+¥332.9b) and bond (-¥609.4b) investments continue to suggest capital inflows into Japan. Last week, the Tankan large manufacturing survey missed expectations.
As the yen runs out of steam, we are now neutral on the yen in the short-term. Note that the currency is trading within a normal range, based on technical indicators on the daily chart.
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.