Coronavirus Fears Whet Yen Appetite

Japan, CoronavirusThe Japanese Yen was able to keep earlier gains versus the greenback during Asian trade on Friday on growing concerns over the spread of the Coronavirus. Riskier assets were weighed down by those worries, as well, and dismal data from the Eurozone tanked the Euro and kept trader sentiment firmly in favor of safe haven assets. The latest figures from the Eurozone showed a decline in industrial output and, coupled with the drop in consumer spending/retail sales, analysts say that merely reinforces expectations that the European Central Bank will extend an accommodative monetary policy. On Thursday, the European Commission released its outlook for this year and next, and revised growth projections down to 1.4% over the two year period, a decline from the 2019 forecast of 1.5%.

In Tokyo trading, as of 11:44 am (JST), the USD/JPY was trading at 109.8340 Yen, up 0.0173% and moving off the earlier low of 109.725 Yen. The EUR/JPY was trading at 119.0170 Yen, down 0.0176%; the pair has ranged from 118.857 Yen to 119.144 Yen in this session. The AUD/JPY was higher at 73.852 Yen, up 0.1247% while the NZD/JPY was lower at 70.660 Yen, down 0.0453%.

Eurozone and US Data in Focus

Later today, FX traders will focus on more data from the Eurozone, specifically the preliminary GDP reading for the 4th quarter of 2019. Analysts and economists are still calling for a flat reading of 1% on a year-over-year basis, and unchanged at 0.1% on a quarter-over-quarter basis. Before that, however, German GDP figures will be released with analysts predicting a flat 1% reading on a year-over-year basis, and a drop to 0.4% (from 0.5%) on a quarter-over-quarter basis. Then, focus will shift to the US where retail sales figures and industrial production data will be released. Forecasts are calling for the Retail Sales Control Group to fall to 0.3% (from 0.5%), while industrial production should see a margin improvement to -0.2% (from -0.3%).

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