In the longer term, the safe-haven yen demand could rise due to increasing concerns over the slowing global growth. The Chinese economic reports have disappointed today as retail sales and industrial production data came in lower than expected. The figures stoke worries about the potential global slowdown next year.
As such, should the incoming data from major economies continue to send signals, global financial markets could face a more profound downside pressure which in turn will play into safe-haven assets’ hands.
This week the yen demand was low due to some progress in US-China trade talks and fresh positive developments on this front will likely cap the potential in the Japanese currency so far. But the longer term outlook points to upside risks for the yen.