By TraderVox.com
Tradervox.com (Dublin) – The dollar-yen cross is trading within range but closed last week on the lower side as investors sought the safety of the yen. Safe haven demand has been spurred by growing concerns about the euro zone economy as well as the global economic slowdown. Last week, the Bank of Japan decided to refrain from making any intervention on the strengthening yen as it waits for any action from the European Central Bank. There are three major events from Japan that are expected to shape the USD/JPY sentiments this week. The first major event will on Sunday where the preliminary GDP data will be given. The preliminary GDP data showed one percent expansion of the GDP in the first quarter. The figure was then revised to 1.2 percent GDP growth. The encouraging results are positive for the yen and investors are buying the yen as safe haven demand rages.
The two major reports will be released on Monday; the Monetary Policy Meeting Minutes and the Tertiary Industry Activity which will be released at 2350hrs. The Bank of Japan members showed optimism in their last meeting, deciding to refrain from making any further asset-purchases. This has been related to the growing domestic demand which has spurred economic recovery in the country. Some of the major downside risks facing Japanese economy include the growing global uncertainty, risk of deflation, and the never-ending euro zone debt crisis. In their last meeting, the Monetary Policy Committee members decided that the BOJ should be ready to intervene should the risks materialized, but decided to refrain from making any intervention at the moment. Investors will be looking at the minutes to evaluate how members assessed the economy.
The Tertiary Industry Activity report, which will be released at 2350hrs, is expected to show some improvements. The services sector activity was encouraging in May when it increased by 0.7 percent, which is better than the market expectation of 0.2 percent. There were improvements in retail trade, wholesale trade, welfare and medical health care. Further improvements were registered in amusement services, compound services, information and communications, and technical services.
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