Not a lot going on from Japan this week, which means the yen’s will likely take its cues from market sentiment.
Do you think we’ll see one-directional moves from the safe haven this week?
Here’s a list of potential catalysts that might affect the yen’s price action:
Inflation reports (Oct 22, 11:30 pm GMT)
- Headline monthly inflation is expected to speed up from -0.1% to 0.2%, while the core figure could improve from -0.3% to -0.4%
- Annual inflation could slow down from 0.2% to 0.1%, while the core annual rate is seen printing a flat rate for September
- Bank of Japan (BOJ) Governor Kuroda recently shared that the central bank has no plans on changing its inflation target and forward guidance
PMI releases (Oct 23, 12:30 am GMT)
- Japan’s domestic releases have been spotty so far, with improvements in manufacturing activity balancing out shaky consumer sentiment and activity during the pandemic
- Jibun’s manufacturing PMI is expected to improve from 47.7 to 48.5 in October
- Services PMI could also expand from 46.9 to 47.6 for the month
Market risk sentiment
- Brexit, U.S. Presidential debates, Eurozone PMIs, and RBA’s meeting minutes are some of the countercurrency headlines that could send the yen crosses all over the charts this week
- Look out for policy updates from the U.S., which could be delivered for maximum headline impact ahead of the elections
- COVID-19 headlines (lockdown, stimulus, and vaccine progress) will continue to influence risk-taking and the demand for the low-yielding yen
Technical snapshot
- The yen has gained the most value against the Aussie in the last 30 days
- JPY has also strengthened against NZD and EUR this last month
- The yen lost the most value against the Loonie, pound, and U.S. dollar during the time period
- EMAs show the yen’s short and long-term bearish trend against the Loonie
- JPY remains bullish against USD and GBP on the daily time frame
- The yen is still under the 200 EMA though short-term demand could push the safe-haven into bullish trends against some of its counterparts
- JPY was most volatile against GBP and the comdolls in the last seven days
This post first appeared on babypips.com
