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Yen Ticks Lower As Japanese Retail Data Miss Expectations

Yen Ticks Lower As Japanese Retail Data Miss Expectations

David Cottle, Analyst


Talking Points

  • The Yen took a small hit after the release of decidedly mixed Japanese retail numbers
  • Overall retail trade fell in December, as did sales at larger stores
  • However, trade will have been thinned by widespread Asia/Pacific holidays

The Japanese Yen slipped a little against the US Dollar on Monday after the release of some mixed retail figures from its home country. However, the magnitude of the fall was pretty small, suggesting that the US Dollar remains pressured by US politics and recent economic numbers.

Overall retail trade fell by 1.7% in December from November, according to official figures. That was way below the expected 0.5% fall and the previous month’s 0.2% rise. On-year trade was up 0.6%, again well below the predicted 1.7% gain and November’s 1.7% increase.

However, this was the second straight monthly annualized gain and November’s rise had been the first for nine months, so the figures weren’t all bad news.

Large retailers’ sales made worse reading though. They fell 1.3% against expectations of a 1% slide and were also much weaker than the 0.3% fall recorded in November.

Figures like these would usually mean that the Yen takes a big hit. After all, the focus of Tokyo’s vast monetary expansion has been an attempt to stoke consumer demand and hopefully, through that, pricing power. Weak numbers such as this suggest that this is far from paying off.

However, USD/JPY barely moved on the data. Investors seem nervous about both Donald Trump’s aggressive anti-immigration moves over the weekend, when passport holders from seven Middle Eastern states were effectively banned from entering the US for a 90-day period. US Dollar bulls have also been given pause by some weaker fundamental numbers out of the US last week, notably durable goods orders and overall GDP growth.

In any event USD/JPY was at 114.73 after the data, from 114.67 just before it.

Inching up: USD/JPY

Chart compiled Using TradingView

It’s probably worth noting that overall foreign-exchange trading will be thinned on Monday by public holidays in China, Hong Kong, New Zealand and Singapore.

DailyFX analysts have made their first-quarter forecasts. See how they’re bearing up here.

--- Written by David Cottle, DailyFX Research

Contact and follow David on Twitter: @DavidCottleFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.