Japanese Economic Data Mixed, Yen Recovers from Weakness

The Japanese yen was one of the weakest currencies on the Forex market today, second only to the US dollar. But currently, it has managed to recover, trading either flat of higher against most other currencies, remaining weak only against commodity ones. The relatively robust market sentiment made traders not interested in safety provided by the Japanese currency, preferring to seek riskier assets that can provide a higher yield. Domestic data was mixed, providing the yen with no support.
Japan’s Cabinet Office reported that core machinery orders dropped 7.6% in June. The decline followed a 1.7% rise in May, which itself followed a 12.0% slump in April. The actual reading was a total surprise to analysts who were counting on a 2.1% increase.
Meanwhile, a report from the Ministry of Finance revealed that Japan’s trade balance deficit shrank from ¥0.41 trillion in June to  ¥0.03 trillion in July, seasonally adjusted. That was also a total surprise as specialists had predicted an increase of the deficit to  ¥0.44 trillion. Looking deeper into the data, the separate components looked good too. Imports fell by 2.7% but exports rose by 4.7%.
The US dollar was extremely weak lately, which explains why the yen was able to gain on the greenback. The Federal Open Market Committee will release minutes of its latest monetary policy meeting today, and usually, such a release have a strong impact on the market. But most analysts do not expect any big revelation from the FOMC today, therefore it is likely that the current trends will remain in place.
USD/JPY slipped from 105.42 to 105.35 as of 12:39 GMT today, touching the low of 105.10 intraday. EUR/JPY was little changed at 125.72. GBP/JPY fell from 139.52 to 139.16.
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