Japanese economic data is gaining importance among yen traders for the first time in almost a decade, as expectations grow of further interest-rate hikes by the central bank.
That marks a mindset change since the Bank of Japan ended its negative-rates policy last March. After the central bank started radical monetary easing in early 2016, traders had little doubt the stimulus would continue regardless of what economic indicators showed, making it mostly safe to ignore Japanese data.
Recent currency swings show that’s no longer the case. The dollar-yen exchange rate moved 0.11% in the five minutes after the latest wage data released on Feb. 5, the biggest reaction since 2017, according to Bloomberg-compiled data. A 0.18% change in the currency pair on Feb. 17 in the five minutes following gross domestic product data was the second biggest since 2016.
