Economic News

JPY - General Information

The Japanese Yen is the official currency of the constitutional monarchy of Japan. It is very common to be used in international transactions and as reserve currency besides the Pound Sterling, Euro and United States Dollar. The Yen is used science 1870 and was first introduced by Meiji Government. It was first used to create a system reassembling the European currency System. The following article will discuss the daily JPY updates.

Yen is the official currency of Japan and comes with the JPY abbreviation. Japanese Yen or JPY is another major currency in foreign exchange market, thus, it is used as reserve currency and plays an important role in international market.

Pronounced as 'en', yen was launched in 1870 by the government of Meiji based upon the purpose of launching a single currency power (similar to the Euro system) to substitute the complicated monetary policies and system of Edo period. This 'New Currency Act' of 1871 has a major role in establishing yen as the economical power of Japan, as well as in making Japan a apart of international market and in achieving gold standard.

With the vulnerability of Japan towards increasing prices of crude oil, value of Japanese has been on rise too. The only fact that makes yen lag behind or weak is that it is circulated only within the Japanese country, which is also seen as a reason for low productivity for domestic firms, business houses or companies.

Japanese yen come in four types of notes and six types of coins. While the note or bill version of yen is available in the denomination of 1000 yen, 2000 yen, 5000 yen and 10,000 yen, the coin version of yen comes in the denomination of 1yen,5 yen, 10 yen, 50 yen, 100 yen and 500 yen. The Japanese coins were launched in year 1870, with 50, 20, 10 and 5 yen in silver coins and similarly, 20, 10, 5 and 2 in gold coins. Along with these silver and gold yen coins, there were also copper coins in denomination less than 1 yen which were later discarded in 1953. Japanese notes were launched in the year 1872 with the denomination ranging from 10 Sen to 10, 000 Yen.

The currency is designed in such a way that it makes it easy for people with sighting problems to identify the currency and its denomination, such as all the coins and bills are of different sizes and some notes have identification marks like bumps.

Before bank of Japan became the authorized issuer of the Japanese currency, many other parties were involved in issuing of yen, such as imperial Japanese national bank and ministry of finance.

Value of yen v/s other currencies currently is, 1 USD is equal to 130.30 yen, 1 Canada dollar is equal to 82.82 yen, 1 UK pound is equal to 187.96 yen, 1 Australia dollar is equal to 69.65 yen, 1 euro is equal to 115.74 yen, 1 Indian rupee is equal to 2.85 yen, 1 Hong Kong dollar is equal to 1 Swiss franc is equal to 79.07 yen and 1 Singapore dollar is equal to 71.76 yen. These values are subjected to change or fluctuate depending upon the Forex trade or any change in monetary policy from the issuing authority of yen i.e. bank of Japan.

Go to JPY Forex Weekly Archive

Go to Mer 04-03 updates archive

Go to Jun 3-11 updates archive

Go to Feb 5-29 updates archive

Daily Economic News - May 06, 2008

The JPY appreciated vs. the greenback yesterday as the pair tested bids around the 105.10 level and capped out at around 105.45. Liquidity was reduced on account of the ongoing Japanese Golden Week holidays and is likely to continue to be low in Tokyo for the duration of the week. Investors worry over a recent rise in the JPY as it makes Japanese products less competitive abroad and hurts the value of overseas sales when translated back into the Japanese currency. With steady gains primarily against the Dollar, much of the Yen's bullish movement could be contributed to the repatriation of overseas earnings by Japanese companies into the local economy. This has had a positive effect on major JPY currency pairings, as the rising turmoil in the market is leading to more investment in the Japanese currency. Today, there is no important economic news expected to be released in Japan, however, we should see an active JPY trading in response to key U.S and Euro-zone data releases. The near term outlook for the JPY remains quite bullish as a U.S economic redemption is unlikely to occur anytime soon and recession fears will continue to drive risk aversion.

Daily Economic News - May 05, 2008

Last week the JPY underwent a volatile trading session with most of its currency pairs. The JPY lost some strength against the USD, yet it kept a steady rate against its other crosses. A batch of significant data was delivered last week, including an interest rate announcement which kept the Japanese economy with the lowest rate throughout the industrial world, and Retail Sales figures that reflected another month of increases. The Japanese have now posted 8 straight months of Retail Sales increases showing $116.7 billion worth of sales since the beginning of the calendar year. Several of Japan's economic chiefs gave speeches, stating that as a result of the ongoing uncertainty regarding economic activity and prices, the Bank of Japan (BoJ) will not set the direction of monetary policy in advance. As for this week, most of the Yen's volatility will derive as a result of overseas economic events. Traders should pay close attention to U.S Nonfarm Productivity results, scheduled for Wednesday, and to the U.S Trade Balance on Friday. Today is Children's Day in Japan and all banks are closed. Forex Traders should expect low liquidity throughout the day.

Daily Economic News - Apr 10, 2008

Yesterday, the JPY traded with mixed results, as we heard from the newly appointed Governor of the Bank of Japan(BoJ) Massaki Shirakawa. The JPY added 1.3% to its value against the USD, mainly as a result of worries from the US sub-prime related economic problems, and 0.6% against the Sterling. However, the JPY kept its bearish trend since the beginning of the week against the EUR, losing 40pts. Mr. Shirakawa's speech yesterday supplied many indicators for JPY investors and carry traders. Shirakawa said that the risks to the Japanese economy are now increasing, led by a slowdown of the U.S. economy, while the global financial and capital markets continue to be unstable due to the sub-prime loan problems. Investors seem to have taken Shirakawa's remarks as confirmation that the sensitive Japanese economy will continue to be badly affected by the financial crisis from across the Pacific. The only important report from Japan yesterday, outside of the BoJ Governor's remarks was the yearly Machine Tool Orders index, which surprisingly came back well above expectations. The figure showed a 2.9% rise in the total value of new orders placed with machine tool manufacturers in Japan. Looking ahead to today, both the Current Account and the M2+CD money supply reports are expected to fall from previous readings, if those expectations come true, expect the JPY to slightly depreciate against its major rivals.

Daily Economic News - Apr 09, 2008

Risk behavior returned to the market yesterday as a wide range of economic data provided mixed results regarding the credit crisis being felt around the world. There looks to be a concerted effort by world financial organizations to stamp out the credit crisis once and for all. To do so would be a naturally risky move, one that would bring great liquidity to the Japanese market and the JPY. The intervention of the IMF into global matters concerning the sub-prime crisis, suggests that the severity of the problem is far deeper than most would think. The near 1 Trillion dollars in losses that financial institutions could be forced to suffer is something that needs to be avoided, but not at the expense of any other economic aspect. The JPY now becomes a centerpiece, as carry trading is one of the more lucrative moves in the currency market and almost always includes the JPY. In other JPY related news, the Japanese Government approved the permanent appointment of Massaki Shirakawa. The appointment comes after weeks of tug-o-war within the Japanese Government. What can be said is that any stability from the office of the BoJ should contribute to possible JPY bullishness. Today, we can expect a host of Japanese events. The BOJ Monthly Report, Machine Tool Orders, Core Machinery Orders, Current Account and M2+CD Money Supply are all expected to be released to mixed results. The JPY is poised for a breakout, the question simply becomes when. Today we also expect Interest Rate Announcements for the JPY, as expectations have the benchmark 0.50% rate staying put, as the current state of the BoJ is still unsure.

Daily Economic News - Apr 08, 2008

The yen decreased against all of the major currencies as a rally in stock markets worldwide encouraged investors to buy higher-yielding assets funded by loans in Japan. The yen fell 1.2% to 102.67 against the dollar at 12:30 p.m. in New York, from 101.47 on April 4. Japan's currency declined 1% against the euro to 161.30, from 159.69. Data released in Japan overnight saw the February leading index of economic indicators rise to 50.0 from a revised 36.4 in January while the Coincidence Index improved to 44.4 from 20.0 in January. The Bank of Japan Rate decision on April 9 will most probably keep its target lending rate unchanged at 0.5%, the lowest among industrialized countries, as economic expansion cools, according to all 41 economists surveyed by Bloomberg News. Traders see a 59% chance the bank will cut the benchmark rate by year-end, according to JPMorgan Chase calculations. The tight expected monetary policy and few optimistic opinions on the future status of the US equity market will probably take the USD/JPY to a moderate bullish trend as the Japanese economy continues to weaken steadily.

Daily Economic News - Apr 07, 2008

Downward pressure on the USD intensified after the U.S. Employment data increased recessionary concerns, and spurred many investors to dump their holding of the troublesome currency. Last Friday, the JPY traded 0.5% higher against the USD at 101.86, but was still on track for its biggest weekly loss since 2004. The reason is the economy. One should keep in mind that there was a slowdown in Japanese business investment which in all circumstances remains a key driver of the economic growth. To make matters more difficult, Goldman Sachs Investment bank has decided to downgrade the Japanese car manufacturing industry. The bank fears that the major Japan industry might suffer from a decline in U.S. demand. As a result, the JPY will probably continue to lose ground against the USD. On Wednesday, the Interest Rate Announcement will be followed by the BoJ's Monthly Monetary Report. With interest rates already at 0.5%, there is not much room for the central bank to move. There is no important economic news expected to be released in Japan, however, today we should see active JPY trading in response to key U.S and Euro-zone data releases. The near term outlook for the JPY remains pretty bearish as a U.S economic redemption is unlikely to occur anytime soon and recession fears will continue to drive risk aversion.

Daily Economic News - Apr 01, 2008

The JPY depreciated yesterday against the USD losing most of its profits gained last Friday. The JPY lost 1.2% from its value and closed the trading session at the rate of 99.91 JPY per USD, while the EUR climbed 0.8% to 157.80 JPY. The market rebounded from a tumble on Monday, despite the weaker-than-expected results of the Bank of Japan Tankan business sentiment survey. As a matter of fact, there was not much surprise in the Tankan. The market has already priced in these weak readings, adding to evidence of a worsening economic outlook and reinforcing some market speculation that the BoJ may cut interest rates later in the year. Today, the only news to be released from Japan is the yearly Monetary Base report which is not expected to have a major influence on JPY behavior today. Forex traders should follow the figures coming from the U.S. and Europe to indicate if the JPY will keep depreciating today or correct.

Daily Economic News - Jan 31, 2008

The JPY rallied sharply yesterday on the back of the Fed rate cut as investors pared off any risky positions thereby causing carry trades to unwind further. The current uncertainty in the global financial markets is causing all the high yielding currencies to depreciate sharply and we should see the JPY continue its bullish momentum as risk seeking investors run for the hills. The Japanese economy is showing moderate growth and it is finally beginning to experience some positive inflation, so this could be a good launching pad for a future rate hike from the BoJ. In the meantime a rate hike remains unlikely due to possible deflationary pressures and there will need to be sustained expansion before the BoJ can consider a rate hike. The outlook for the JPY remains very bullish particularly as global market instability and currency volatility continue to drive risk-aversion. However, as soon as the U.S economy is back on its feet, investors will once again be willing to take risks and this could pull the JPY off the bullish express.

Daily Economic News - Jan 30, 2008

Japan's industrial production rose less than expected in December, as the Japanese government downgraded its assessment on industrial production. Initial reports showed a moderate rise in output trends; however the decline in production numbers resulted in a flattening out of trends. The index for industrial output in December was released at 111.9, Japan's second-highest reading since January '98, also reached briefly in August of last year. Industrial production rose 0.7% in December from a year earlier, as the figure has risen consistently for over 2 years. Manufacturers' output is expected to drop 0.4% in January and a further 2.2% in February, according to the survey. Yesterday, the JPY made gains on most of its major currency crosses, as Asian stock markets continue to fall ahead of today's Federal Reserve statement. Looking ahead, Japan will release its Manufacturing PMI today at 23:15 GMT; the data is forecasted to stay close to last month's figure of 52.3, and should not affect JPY prices by that much. It is unclear to how the JPY will respond to today's news events as it has range traded for most of January.

Daily Economic News - Jan 29, 2008

Fears of a U.S. recession have now spread to Japan as slowing global activity and dropping foreign demand have led to speculations of Japan also entering a recession. As expected, the Bank of Japan kept its leading interest rate unchanged at this past week's monetary policy meeting. The central message from the BoJ remains that it believes that the current weakness in the Japanese economy is temporary, and that the next move in interest rates will probably be up. Today there is no economic data expected to be released from the Japanese markets apart from the Industrial Production, which is expected to finally move into positive territory. The JPY may still continue to drop further downwards against the USD during the day, although it appears that the pair has apparently stabilized in the 106.00-108.00 area. Trading the USD/JPY pair this week is likely to be dominated almost exclusively by the U.S. news flow. Therefore, traders will be looking ahead to the 2 key events on the U.S. calendar this week- the FOMC and NF.

Daily Economic News - Jan 24, 2008

The credit crunch in the U.S. and the slow growth are causing the JPY to surge, clouding the outlook for the nation's exporters. The JPY gained 5% against the dollar this year, cutting the value of overseas sales. Half of Japan's shipments overseas are settled in U.S. dollars even though the country is relying more on China and other emerging markets for trade. Gains in the currency are already hurting exporters' earnings. Toyota Motor's annual operating profit falls about 33 billion yen for every yen that the currency gains against the dollar past 115, according to Credit Suisse Group. Toyota's shares have fallen 16% this year. It looks as if the JPY is approaching a point where companies won't be profitable. Exporters say they can make money as long as the USD/JPY is weaker than 106.06. Japan's currency is already 8% higher than the level the nation's largest exporters based their profit forecasts on for the year ending March. Today, there are two Derivatives of the Consumer Price Index (CPI) expected to be released from Japan. The first is the Core CPI y/y which is expected to rise a bit from 0.4% to 0.6%, and the second is the Core Tokyo CPI y/y which is expected to remain unchanged at 0.3%. Both releases are due at 23:30, and will probably push the JPY further up, as we have grown accustomed to in recent times.

Daily Economic News - Jan 21, 2008

Last week the Japanese currency reached its highest peak versus the U.S. dollar since May 2005. The Japanese currency got stronger versus all of the 16 most- active currencies as the U.S. manufacturing index decreased to a six-year low. The BoJ will probably keep interest rates on hold this week. Governor Toshihiko Fukui will leave the benchmark overnight lending rate at 0.5% on Jan. 22. The BoJ will publish its monthly assessment of the economy and a review of the twice- yearly outlook at 3 p.m. and Fukui will speak at a news briefing at 3:30 p.m.

Fukui repeated last week that rates need to be increased progressively on condition that the economy expands as projected. He mentioned that by keeping interest rates low for an extended period could make growth unsound. In addition, Japan's Nikkei 225 Average recovered from an early dive to end 0.6% higher, lifted by expectations that Bush will propose measures to boost the declining U.S. economy and thus bolster consumption thereby aiding the Japanese export market. It looks as if the JPY will continue its relatively strong bullish move, and if the Japanese rate will remain unchanged for an additional month, we might see carry trades resume at a moderate rate if the US equity will allow the move with a certain strengthening period.

Daily Economic News - Jan 16, 2008

The JPY appreciated sharply yesterday on the back of the soft U.S Retails Sales figures. This negative news unsettled the global financial markets and therefore prompted carry trades to unwind further. Ever since the decline of the greenback began, the JPY has been gaining steadily all across the board and this is mainly due to the risk-averse sentiment that is got a stranglehold on carry trades. Earlier today, during the Asian trading session, there was more positive news for the JPY as the Japanese CGPI figure, which measures the rate of inflation experienced by corporations when purchasing goods, released at a beating expectations figure of 2.6%. This upside surprise is a positive sign for the Japanese economy as this rise in corporate inflation could be passed down to the consumer. The Japanese economy has been experiencing deflation in recent months and therefore this has been preventing the BoJ from seriously considering a rate hike, as an interest rate increase would further lower inflation. However if this positive CGPI figure results in an increase of consumer inflation then we may finally see a rate hike by the JPY, which will cause the Japanese currency to continue to appreciate sharply particularly against the high yielders.

There was more good news for the JPY as the Japanese Current Account released at 2.16T, beating the forecasted figure of 1.87T and this give further indication to investors that the Japanese economy is in a healthy state because such a current account surplus is mainly influenced by the large differential between exports and imports which in turn will positively influence growth. The medium term outlook for the JPY remains very much bullish and a reversal will only occur in tandem with the U.S financial sector.

Daily Economic News - Jan 15, 2008

The Yen was rewarded with positive gains against all 16 major currencies, as a combination of foreign economic data and the recovery in the Dow helped instill more investor confidence.

The Dow rallied yesterday to finish 171 points up, and was critical in resurrection carry trading for the day. Though the recovery did not initially affect the Yens big pairs (USD/JPY, GBP/JPY, and EUR/JPY), a string of unexpected data from the US helped the Yen sufficiently increase their gains for the day.

In addition to outside factors, news that Japan will exchange roughly sixty million dollars of coupons and principal payments to Euro, (which will be claimed by a handful of European nations this week) sparked a local growth in the Japanese currency as well.

The Japanese economic calendar was empty yesterday, as the country celebrated the coming of age holiday. Today we expect to see the release of Core Machinery Orders as well as current account information. Expectations show a significant drop in Core Machinery orders as the month December failed to produce expected growth. Those news events are expected to generate relatively small interest amongst traders, as most of the focus will be on USD related events. This situation will probably be quite common in the near future, as the fate of the greenback will have much more effect on global economic events.