FXStreet (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ, observes a continuation of the offered tone around the JPY.
"more weak economic data from Japan weighs on yen The yen has continued to weaken modestly in the Asian trading session with USD/JPY rising back towards the top of its recent tight trading range between the 101.00 and 103.00 levels. Yen weakness reflects both improving global investor risk sentiment and building speculation that the BoJ may decide to accelerate monetary easing in response the loss of economic momentum in Japan."
"It was revealed overnight that core machinery orders rebounded by less than expected (8.8%) in June after a sharp contraction (-26.8%) in the previous two months. The report has further highlighted that downside risks to the BoJ’s economic growth outlook have increased, following closely after the release yesterday of the disappointing GDP report for Q2."
"The Nikkei has reported today that the Japanese government is planning a JPY4 trillion stimulus fund for regional economies in the FY2015 budget. The government will also continue to pressure companies to increase wages to support the economic recovery."
"Global investor risk sentiment has been boosted by building investor expectations of more policy stimulus to support global growth which is also weighing on the yen. The Bank of Korea lowered their key policy rate by 0.25 point to 2.25% overnight for the first time since May 2013."
"The release yesterday of the weaker than expected US retail sales report for July and the BoE’s less hawkish than expected Quarterly Inflation Report have also provided reassurance to investors that global liquidity conditions will remain supportive for risk assets in the near-term."