The Japanese yen has largely been caught in the crossfire of the U.S./China Trade War. Any positive news that comes out of this weekend’s summit between Trump and Xi Jinping should be a “win” for the Japanese yen. Japan saw their October retail sales figures come out on Tuesday at a very strong 3.5% vs an expected 2.6%. More Japanese data was released overnight and was fairly mixed, however they did see the strongest jump in their factory output data since 2015.  We’ve also heard some speak out of the BOJ, suggesting that Japans extended period of low interest rates have actually begun to have a negative impact on economic activity – that’s was a slightly hawkish statement out of the BOJ and could imply that they may begin to allow their interest rates (JGB Yields) float higher.  I’d be hard pressed to suggest that I’m bullish on the yen, but I do expect a turn back higher in the Japanese currency on the back of strong data, and perhaps some sense that the US and China are beginning to find some common ground on trade. The yen remains bearish trend, with immediate downside to 87.60 and upside to 88.50 – that’s the immediate term range that should be risk managed.

Japanese Yen Weekly Chart