© Dukascopy Bank SA
The USD/JPY followed the tendency of GBP/USD pair, with major fall at the end of the week. The gauge opened a new week on a rather positive note, reaching almost 120 level, but started to decrease gradually in value. Meanwhile, the Japanese manufacturing PMI, announced on Monday, had ticked higher to 52.6 points from 52.5 points in the preceding month. The next day, the Japanese yen was hovering near its 10-week highs, affected by a risk-off mood on markets after the sell-off in Chinese equities forced investors to seek safe-haven assets. Moreover, the pair extended this year's winning streak on Wednesday, after the latest decision made by Chinese officials, in order to support the world's second-largest economy. Chinese officials decided to set the Chinese yuan at its weakest level since April 2011, just two days after stock markets diminished more than 6% on the back of a weak manufacturing gauge reading. Taking into account, that the first trading week of 2016 was marked with the heavy sell-off of riskier assets, the safe haven of the yen prevailed, pushing the pair sharply lower back on Friday.
Compared to the previous week, the bullish sentiment significantly weakened, as now only 55% of traders expect the pair to rise, comparing to the previous 85% of bullish votes. As a result, the average median for the pair for the end of this week decreased to 117.9. As usually, the vast part of economic news will come from the United States, including initial jobless claims on Thursday and retail sales as well as industrial production report on Friday.
© Dukascopy Bank SA