A lack of market-moving catalysts confined the yen in tight ranges last week. Will the BOJ’s event inspire one-directional trades?
Check out the potential catalysts that might affect the safe-haven’s prices this week:
BOJ’s statement (Dec 18, Asian session)
- A month and a half ago the Bank of Japan (BOJ) made no changes to its interest rates, long-term bond yield targets, and its lending programs
- The central bank also downgraded its growth and inflation estimates though it shared an upbeat outlook
- JPY still strengthened at the time as markets were more worried about lockdowns in Europe and the U.S. elections
- Analysts don’t see policy changes from the BOJ this week
Lower-tier economic releases
- Tankan’s quarterly manufacturing index (Dec 13, 11:50 pm GMT) to improve from -27 to -17 in Q4
- Tankan’s non-manufacturing index seen at -7 (from -12)
- Final industrial production (Dec 14, 4:30 am GMT) to be revised from -9.0% to -3.2% in October
- Trade surplus (Dec 11, 11:50 pm GMT) to clock in at 510B JPY (vs. 873B JPY in November with exports outpacing imports
- Markit’s manufacturing index (Dec 16, 12:30 am GMT) to return to expansion (50.0) from 49.0 reading in December
- National core CPI (Dec 17, 11:30 pm GMT) to print at -0.8% after 0.7% decline in October
Safe-haven demand
- Broad market themes like vaccine updates, Brexit negotiations, lockdowns in the European region, and stimulus deals will continue to influence the yen’s intraweek trends
- The Fed’s statement will affect USD/JPY’s prices and maybe take the other yen crosses along for the ride
Technical snapshot
- Stochastic considers the yen “oversold” against the comdolls and the European currencies
- USD/JPY is mostly in neutral territory on the daily time frame
- JPY is approaching overbought status against GBP
- SMAs reflect the yen’s short and long-term bearish demand against the comdolls
- USD/JPY is still on bearish trends
- JPY is seeing short-term bullish pressure against GBP, EUR, and CHF
- The safe-haven yen was most volatile against the pound and the comdolls in the last seven days
Missed last week’s price action? Read JPY’s price recap for Dec. 7 – 11!
