The Japanese Yen has been performing better against most of its major counterparts this week. Apart from the US 10y T-Note moving up, one of the main reasons the yen has been strong is due to the Japanese fiscal year end (1 April – 31 March). As we move towards the end of march, this is a period where we see large inflows in yen pairs. Japanese firms and investors repatriate their profits meaning that the buy the yen. We then see the Nikkei falling as money is moving out of the stock markets into banks. Also as a pound bear, I will be looking for selling opportunities. The UK is pushing hard for the implementation of the Brexit referendum that was voted for last year. The outcome of that is to the downside against the pound.
Though there aren’t any top tier economic data from either countries, market participants will be looking at today’s UK retail sales report. A better report is expected compared to last month’s. It is not given that the outcome will be good as wage growth has slowed. The British consortium reported a smaller decline in shop prices and spending, both remained negative.