Yen are you a safe haven or not?

Analysts will tell you that Japan is a current account surplus currency. However, with global tight yield spreads, the economy finds it difficult to recycle surpluses efficiently. How are they relieving the pressure? Corporate Japan is directly investing abroad, an important alternate channel for recycling the country’s surplus. If you add the BoJ to this equation, using tactical direct currency intervention, then the upside for the currency should be limited. Everyone and their mother seems to be short yen outright and for risk reasons has had a horrid time depreciating the yen. Thus far, it’s been a long slow grind. There is growth data out this week.

Below are some of the highlights of the week:


  • JPY: Finance Minister admits that they were targeting USD/JPY 80 by intervention.
  • AUD: ANZ job advertisements declined -0.7%, m/m, in October, following a -2.2% fall last month.
  • IDR: Indonesian GDP growth remained robust in Q3 at +6.54%, y/y. With inflation slowing and Bank of Indonesia easing, the constructive macro environment is likely to support capital inflows.
  • TWD: Inflation moderated to +1.22%, y/y in October from +1.37% in September and below the consensus forecast for +1.34%.However, export growth remains strong, rising +11.7% yoy vs. +5.0% expected.
  • AUD: NAB business confidence index recovered printing +2 in October from -1 in September, but still far below the 6.2 average in H1. The employment sub indices fell to -1.2 in October from 2.9 in September,
  • Hong Kong Chief Executive Donald Tsang said that the HKD peg to the USD will stay at least until the CNY becomes fully convertible.
  • CNY: Chinese data is finding it difficult to support riskier currencies. CPI inflation fell to +5.5%, y/y in October. Retail sales growth of +17.2%, y/y in October was weaker than expected last month, (+17.6%). Industrial production grew +13.2%yoy, also weaker than expected (+13.4%) and slower than September’s +13.8%.
  • AUD: Westpac consumer confidence rose +6.3%, m/m to 103.4 in November, likely due to last week’s surprise RBA rate cut.
  • IND: The official release is not until December 1st, but India’s trade deficit widened to -$19b in October due to a collapse in export growth to +10.8%, y/y, from +36.4%.
  • AUD employment rose +10.1k in October, in line with the consensus forecast. The details were constructive with the rise in employment driven by a +20k increase in full-time jobs while part-time employment fell -9.9k. The unemployment rate was unchanged at +5.2%, below the consensus forecast for a rise to +5.3% while the participation rate was unchanged at 65.6%.
  • CNY: Export growth moderated to +15.9%, y/y, in October while import growth rose to +28.7%.
  • NZD: The Kiwi Business PMI fell 5pts to +46.5 in October while ANZ consumer confidence fell -3.2pts to 112.2 in November.
  • INR: India’s central bank intervened today, catching the market long
  • KWD: BoK kept its policy rate unchanged at +3.25%, widely expected. Governor Kim maintained a hawkish bias, describing monetary policy as accommodative with core inflation forecast to rise on trend.
  • JPY: Japanese loans contracted +0.7%, y/y in September, the smallest fall in two years.


Other links:

Politics and Fixed Income trump FX



  • Retail sales data comes to us from NZD, USD and GBP
  • GBP, CAD and USD release inflation reports
  • Monetary policy minutes and statements come from JPY and AUD
  • JPY delivers growth data
  • EUR will acknowledge German ZEW economic sentiment
  • PPI data is released in USD and NZD
  • Claimants figures are observed in GBP and USD
  • USD finishes their week with Building permits and Philly Fed


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell