Japanese yen appreciated 0.73% last week
The Japanese yen (JYN) managed to claw back its losses after the scare about a second round of tariffs hit the global financial markets last week. The possibility of the second round of tariffs from the Trump administration, especially to target Chinese imports, ignited fears of a trade war. There weren’t many economic data releases from Japan, but the minutes from the Bank of Japan’s meeting last week indicated that the central bank was in no hurry to tighten policy. In the week ending March 16, the Japanese yen (FXY) closed at 106.0 against the US dollar (UUP), appreciating by 0.73%. Japanese equity markets (EWJ), on the other hand, continued to appreciate despite a global decline in risk appetite with the Nikkei 225 (JPXN) posting a weekly gain of 0.97% in the previous week.
Speculators decreased bearish bets on the yen
The Japanese yen (YCL) speculators decreased their net short positions on the yen for a fifth consecutive week, as per the latest commitment of traders report, released on March 16 by the Chicago Futures Trading Commission. As of Tuesday, March 13, Japanese yen speculators had a net short position of 79,539 contracts as compared to 86,845 short contracts in the previous week.
The week ahead for the Japanese yen
This week’s price action of the Japanese yen could be driven by demand for the US dollar, especially depending on the outcome of the FOMC meeting. A hawkish FOMC could lead to further depreciation of the Japanese yen against the US dollar, while the opposite could lead the yen to appreciate. Japan’s February exports, March manufacturing, and inflation reports are expected this week.