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Japanese Yen Halts Rally While Fears Persist

January 31, 2020 at 6:48 by Vladimir Vyun

Japanese yen symbolThe Japanese yen halted its rally, trading flat today. For now, it does not seem that the market sentiment shifted much, and the pause in the rally was likely just a result of profit-taking following substantial gains of the currency. Domestic macroeconomic data was mixed, giving no clear picture of the Japanese economy.

The situation with the coronavirus epidemic was not improving. The number of confirmed cases in China reached 9692, and the death toll climbed to 213. The World Health Organization announced a Public Health Emergency of International Concern. The sentiment improved a bit after the WHO praised China’s efforts to contain the spread of the epidemic and said:

The Committee believes that it is still possible to interrupt virus spread, provided that countries put in place strong measures to detect disease early, isolate and treat cases, trace contacts, and promote social distancing measures commensurate with the risk.

The WHO also advised against travel restrictions:

The Committee does not recommend any travel or trade restriction based on the current information available.

As for Japan’s macroeconomic data, the Statistics Bureau of Japan reported that the Tokyo core Consumer Price Index rose by 0.7% in January, year-on-year, slowing from a 0.8% rate of growth registered in the previous month. Analysts had predicted the index to stay unchanged. The unemployment rate remained unchanged at 2.2% in December versus expectations of an increase to 2.3%.

According to the report from the Ministry of Economy, Trade, and Industry, industrial production rose by 1.3% in December, following a 1.0% drop in the previous month and exceeding the increase of 0.7% predicted by experts. Year-on-year, though, the indicator dropped by 3.0%. Retail sales rose by 0.2% in December from November but slumped by 2.6% from a year ago versus the expectations of a 1.7% decrease.

USD/JPY rose from 108.95 to 109.04 as of 6:47 GMT today. EUR/JPY was about flat at 120.17 after rising to the daily high of 120.40 earlier. GBP/JPY gained from 143.00 to 142.86.

If you have any questions, comments, or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.

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