The Japanese yen had a quiet week, as Dollar/Yen was fairly unchanged. The upcoming week’s highlights include US retail sales and unemployment claims.
Japanese household spending posted a fifth straight decline in February. However, the indicator dropped just 0.3%, compared to a 3.9% decline in January. Core machine orders posted a second straight gain, with a gain of 2.3% in February. This easily beat the forecast of -2.3 percent.
Unemployment claims in the US hit a shocking level for a second straight week up to 6.60 million. This was higher than the estimate of 5.0 million. The week ended on a sour note as consumer inflation declined by 0.4% in March, the first decline since December 2018. Core CPI fell by 0.1% after a gain of 0.2% a month earlier. The US Dollar has emerged as the primary safe-haven asset in the current crisis, outshining the yen. The greenback has performed fairly well despite some appalling job numbers and the outlook for the dollar remains positive.
The anti-risk Japanese Yen may rise if the IMF’s financial and economic assessment of the global economy sparks worries of a deep recession amid fragile credit conditions in the highly-leveraged corporate debt sector. The multi-trillion-dollar market has come under greater scrutiny as the coronavirus has brought the global economy to a grinding halt and threatened borrowers with high debt-servicing costs.
A possible break from 106.706 to 106.450 is expected with a possible bearish rally around this zone. In the alternative scenario the USD/JPY could be rising toward 109.88.
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