Not a lot going on from Japan this week, which means the yen’s will likely take its cues from market sentiment.

Do you think we’ll see one-directional moves from the safe haven this week?

Here’s a list of potential catalysts that might affect the yen’s price action:

Inflation reports (Oct 22, 11:30 pm GMT)

  • Headline monthly inflation is expected to speed up from -0.1% to 0.2%, while the core figure could improve from -0.3% to -0.4%
  • Annual inflation could slow down from 0.2% to 0.1%, while the core annual rate is seen printing a flat rate for September
  • Bank of Japan (BOJ) Governor Kuroda recently shared that the central bank has no plans on changing its inflation target and forward guidance

PMI releases (Oct 23, 12:30 am GMT)

  • Japan’s domestic releases have been spotty so far, with improvements in manufacturing activity balancing out shaky consumer sentiment and activity during the pandemic
  • Jibun’s manufacturing PMI is expected to improve from 47.7 to 48.5 in October
  • Services PMI could also expand from 46.9 to 47.6 for the month

Market risk sentiment

  • Brexit, U.S. Presidential debates, Eurozone PMIs, and RBA’s meeting minutes are some of the countercurrency headlines that could send the yen crosses all over the charts this week
  • Look out for policy updates from the U.S., which could be delivered for maximum headline impact ahead of the elections
  • COVID-19 headlines (lockdown, stimulus, and vaccine progress) will continue to influence risk-taking and the demand for the low-yielding yen

Technical snapshot

  • The yen has gained the most value against the Aussie in the last 30 days
  • JPY has also strengthened against NZD and EUR this last month
  • The yen lost the most value against the Loonie, pound, and U.S. dollar during the time period
JPY Forex Pairs Performance from MarketMilk
JPY Forex Pairs Performance from MarketMilk
  • EMAs show the yen’s short and long-term bearish trend against the Loonie
  • JPY remains bullish against USD and GBP on the daily time frame
  • The yen is still under the 200 EMA though short-term demand could push the safe-haven into bullish trends against some of its counterparts
JPY Forex Pairs EMAs from MarketMilk
JPY Forex Pairs EMAs from MarketMilk
  • JPY was most volatile against GBP and the comdolls in the last seven days
JPY Forex Pairs Volatility from MarketMilk
JPY Forex Pairs Volatility from MarketMilk

This post first appeared on babypips.com

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