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Trend Signals Remain Bearish


Holding Onto Recent Gains

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Japanese markets reopen after a holiday with JPY licking its wounds after a weak showing Thursday. The yen went offered across the board as risk roared back to life amid receding concerns over the Evergrande situation and some positive musings surrounding the Fed's assessment of economy.

  • Japan's national CPI figures will hit the wires at the bottom of the hour, with flash readings of Jibun Bank PMIs due later today. Bloomberg consensus forecast looks for an unchanged (negative) pace of headline inflation and a flat reading of core CPI.
  • Next week, focus turns to retail sales, flash industrial output & comments from BoJ Gov Kuroda (Thursday) as well as unemployment, BoJ Tankan survey & the summary of opinions from the BoJ's latest MonPol meeting (Friday).
  • Yomiuri reported that the gov't will increase the amount of cheap loans for developing nations hit by Covid-19 pandemic by Y200bn to Y700bn, with PM Suga set to announce the decision at the Quad meeting in Washington DC.
  • USD/JPY changes hands at Y110.29, just shy of neutral levels. The high prints of Sep 8/Aug 13 at Y110.45/46 draw bullish attention and a break here would shift focus to Aug 11/Jul 7 highs of Y110.80/82. Meanwhile, a retreat under Aug 16 & Sep 15 lows of Y109.11 would bring Aug 4 low of Y108.72 into view.