More data but Greece likely the main risk for JPY

With BoJ Tankan report last week broadly confirming the ongoing recovery, we will look for further hints on the current economic backdrop from this week's data. Firstly, May machinery Orders (Thursday) is expected to drop -6.5% m/m (consensus: -4.9%) for the first time in three months; however, machinery orders could log a fourth consecutive q/q gain in Q2. 

Secondly, May current account (nsa; Wednesday) is expected to post a surplus of trn (consensus: trn), marking the 11th consecutive month of surplus with services and income account surplus more than offsetting the trade deficit. These data should continue to broadly support the view that ongoing recovery in fundamentals is not supportive of a weaker currency. 

"In terms of inflation, we expect the June Corporate Goods Price Index (CGPI; Friday) to have declined -2.0% y/y (consensus: -2.2%) for the third consecutive month, putting downward pressure on inflation. Indeed, we expect core CPI to drop y/y in July and remain negative until November, but we do not expect a further BoJ easing at least in 2015. That being said, we note that Greek developments following the result of weekend referendum will likely be the main risk factor for USDJPY",said Barclays in a report on Monday.