JPY Forex Weekly Archive

Daily Economic News - May 21, 2008

Yesterday the JPY continued its volatile movement against the USD and the EUR, showing little response to the fundamental data from the local markets. Record Oil prices served as a drag on Asian stock markets, further supporting the JPY. USD/JPY drifted lower throughout the morning trading session finally consolidating around the 103.50 level. The JPY upside momentum accelerated after USD/JPY stops were triggered below 103.50, sending the pair all the way down to 103.20. In a speech yesterday, Bank of Japan Governor Shirakawa, elaborated that he based his rate decision on the alarming rise in global inflation and the downside risk to the world economy. The BoJ's Governor warned also about a possible economic slowdown in Japan, as result of the increase in Crude Oil prices and raw material costs. These issues are hurting Japanese consumers, and squeezing the profit growth of most of corporate Japan. Even within the current state of the world market the BoJ has made it clear that they are aware of inflation and downside risk and that they are prepared to deal with it, and shift policy appropriately if needed. On tap today, we expect another volatile day for the JPY, due mostly to outside news events. From Japan, the only scheduled news will be the Industry Activity Index, and the Trade balance.

Daily Economic News - May 20, 2008

Yesterday the JPY underwent volatile sessions against its major currency counterparts. It saw up and down trends, as it eventually finished the trading day with figures similar to the previous trading day session. The only data published for Japan yesterday was the Tertiary Industry Activity Index, which measures the change in spending for services. The index rose 0.3% in March, following a 1.7% decrease in February. The index contributed very little to the market movement of the JPY. Looking ahead, a bundle of data is scheduled for the JPY throughout the day. The Overnight Call Rate will take place as it is expected to maintain Japan's interest rate as the lowest in the industrial world - 0.5%. Later on, the Bank of Japan (BoJ) Monthly Report will be published, providing a summary of the current economic climate from the Bank's viewpoint. A few hours later, the BoJ will hold a Press Conference, in which Governor Fukui will deliver a speech, revealing the factors that affected the interest rate decision and future monetary policy amendments. Traders should expect major volatility within JPY pairs today, as all of today's data will be centered on the BoJ Press Conference that will likely determine today's trend. d add to JPY volatility. The conference is the best way for the BoJ to elaborate on monetary policy and future changes.

Daily Economic News - May 19, 2008

The JPY saw bearish behavior for most of last week in response to variety of factors. Carry Trades resumed last week as investors borrowed JPY in what was a low volatility trading session. Another contributing factor to the JPY's small drop was a good week from global stock markets. The Japanese currency has gone through a tumultuous couple of months with the absence of an elected economic leader for several weeks, the week long holiday that left it prone to movement based on outside factors and a slowdown in Japan's economy. Last Friday, the JPY saw gains vs. the USD which pushed the vital USD/JPY below 104 as Consumer Confidence woes from the US effected all of its currency pairs. Last week, Japanese economic data most notably, Core Machinery Orders, Preliminary GDP and Industrial Production returned with mixed results. While the GDP figures saw a boost in the month of April, Industrial Production and Machinery Production saw falling trends in their indices. Still though, as has been the case for quite some time, the JPY moves mostly due to outside news. This week the JPY has a basket of news events due for release, headlined by the Trade Balance figures, Tertiary Industry Activity Index and a press conference from the Bank of Japan (BoJ). While the first two events should contribute little to JPY movement, the BoJ conference should add to JPY volatility. The conference is the best way for the BoJ to elaborate on monetary policy and future changes.