The recent events of the week have been taken largely positively to the detriment of haven assets though. The yen is expected to show the largest weekly loss among G10 currencies, highest in over six months against the greenback for instance (-1% week-to-date), suggesting that things should improve for the export-reliant economy. Yet the upcoming data from trade and inflation are likely to leave a bitter taste next week as the Japanese administration seems willing to satisfy US President Trump at great expense, making many concessions without receiving bulletproof guarantees in return. Furthermore, time is running short as both leaders are expected to meet during the United Nations General Assembly starting next Tuesday in New York while concrete negotiations have only just begun.

Indeed, without cosnidering the recent drop of machine orders in July of -6.60% and producer prices in August, which fell –0.90%, lowest since December 2016 due to lower commodity prices compared to last year and more specifically crude oil, forthcoming releases of August trade and inflation data are likely to disappoint. While exports and imports are likely to tick along -10% (prior: -1.50%) and -11% (prior: -1.20%) respectively, marking the largest declines since October 2016, headline and core consumer prices should head towards 0.30% (prior: 0.50%) and 0.50% (prior: 0.60%), thus keeping pressures vivid on the Bank of Japan at its monetary policy meeting next Thursday and paving the way to further easing starting from October 2019. With regard to the latter point, we would assume that Abe's administration's attempt to settle things by committing to avoid currency devaluation and implement tariff reductions on US agricultural products in exchange for lower tariffs for Japanese car manufacturers, at best, is delicate. Japanese policymakers struggle to get assurance from the White House that no tariffs hikes would occur while import quotas could also come into play. Looking at current situation, it seems that a signature of the new trade agreement as early as next week is subdued, putting additional pressures on the export-reliant nation.


Stay on top of the markets with Swissquote’s News & Analysis


Currently trading at 107.97, USD/JPY is expected to trade sideways short-term.

This report has been prepared by AC Markets and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by AC Markets personnel at any given time. ACM is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.

Analysis feed

Latest Forex Analysis

Editors’ Picks

AUD/USD extends recovery gains to 0.6850 despite China’s coronavirus harming risk-tone

AUD/USD stays on the front-foot while taking rounds to 0.6845 amid the initial Asian session on Friday. The pair recently reacted to the preliminary readings of the Commonwealth Bank (CBA) PMI details for January.


NZD/USD nears the weekly high of 0.6625 after New Zealand’s upbeat CPI

NZD/USD pops near the weekly high of 0.6625, before stepping back to 0.6620, after New Zealand’s fourth quarter (Q4) CPI data pleased kiwi buyers during the early Friday. Trade headlines, preliminary Markit PMIs will be in focus.


FX Fear Trade Gains Traction

Currencies sold off sharply today as the coronavirus virus spreads to new countries. China may be aggressively trying to contain the virus but the respite should be brief as more cases will be reported before it all peaks. 

Read more

Gold: Steady above $1,560 amid fears of China’s coronavirus outbreak

Gold stays modestly changed from Thursday’s close while taking rounds to $1,562.5 during Friday’s Asian session. The bullion recently benefited from the market’s risk-off sentiment amid fears emanating from China and trade headlines. 

Gold News

GBP/USD pressured toward 1.31 amid risk-off mood

GBP/USD is trading around 1.31, off the highs. Coronavirus headlines are sending traders to the safety of the US dollar. Speculation about the next BOE move is rife.


Forex Majors