Week in FX Asia – After G20 Aso Comments Will Have Been Forgotten

The market may be confused about what Japan’s Finance Minister Aso said or did not say. However, no one can be confused about Abeconomics and what it is supposed to achieve. Japan was very much likely to, and may still do, come under pressure at the upcoming G20 meeting, February 15–16, to slow down the pace of Yen’s weakness.

So what are Japanese officials to do? Do what the Chinese like to do before visiting US dignitaries land ashore. They apply ‘smoke and mirror tactics’ and gently guide the CNY higher. It’s all about perception. It seems that Finance Minister Aso has become Japans sacrificial lamb. His comments that the yen had weakened more than the officials expected or intended to expresses his governments desire to make some G20 friendly comments.

Aso remarks are only stalling the inevitable, a weaker yen. The two-way action seen since his questionable ‘faux pas’ has promoted a timely correction, it will not stop the market trend. Japan cannot be signaled out at the G20. Other Central banks are also expanding their balance sheets. Japan is using monetary policy its not using rhetoric like ECB’s Draghi and his fellow cohorts.

After G20 the market will once again turn its attention to the BoJ and its new governor for further weakening signals.



* CNY New Yuan Loans
* USD Consumer Confidence
* GBP Consumer Price Index
* USD Advance Retail Sales
* JPY Nominal Gross Domestic Product
* JPY Bank of Japan Rate Decision
* EUR German Gross Domestic Product
* EUR Euro-Zone Gross Domestic Product
* USD U. of Michigan Confidence Survey

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