USD/JPY – Yen Closes in on 100

USD/JPY continues to trade close to the 100 level. The pair was trading in the 99.80 range in Monday’s European session. The G-20 meeting wrapped up in Washington, and any ill feeling toward Japan over the yen’s plunge was not reflected in the G20’s final statement. Today’s highlight is US Existing Home Sales. There are no scheduled releases out of Japan on Monday.

The G20 wrapped up its meeting of finance ministers and central bankers in Washington. As expected, the G20 did not take reprimand Japan over its monetary policies, which have resulted in the yen taking a tumble. Although Japan has faced a lot of criticism leveled against Japan, the G20 issued a very soft statement about monetary easing which didn’t even mention Japan. This clears the way for the Bank of Japan to continue its aggressive easing policy. The yen responded by dropping to four-year lows, as the elusive 100 level is almost within reach.

Last week, the IMF released a detailed report on global growth. The IMF downgraded its 2013 forecast for global growth from 3.5% to 3.3%, and lowered the 2014 prediction from 4.1% to 4.0%. There was some good news for Japan, as the IMF raised its forecast, from 1.2% to 1.6%. The report said that the Bank of Japan’s aggressive monetary steps would increase growth and combat deflation. However, the IMF did note its concern over Japan’s huge debt load, which continues to weigh on the economy.

The markets will be hoping for a turnaround in US numbers, after another dismal week. Thursday saw more key releases and more bad news, as employment and manufacturing numbers disappointed. Unemployment Claims came in at 352 thousand, higher than the estimate of 349 thousand. The Philly Fed Manufacturing Index dropped from 2.0 points to 1.3 points, nowhere near the estimate of 2.7 points. The weak numbers have dogged the US since March, and are raising red flags about the extent of the US recovery.

 USD/JPY for Monday, April 22, 2013

USD/JPY 99.59 H: 99.88 L: 99.59

USD/JPY Technical 

USD/JPY is steady as it trades very close to the 100 line. The pair is receiving weak support at 99.57. There is a stronger support level at 98.45. On the upside, the elusive 100 continues to provide resistance. The pair has  been edging higher, and we could see this barrier fall shortly. There is stronger resistance at 100.54. 

• Current range: 99.57 to 100.00

Further levels in both directions:

• Below: 99.57, 98.45, 97.24, 96.03 and 95.27
• Above: 100, 100.54 and 101.81 and 102.57

OANDA’s Open Position Ratios

USD/JPY is showing movement in the direction of short positions. This could signal that the pair, which has started the week quietly, will move downwards, away from the 100 line. Despite this movement in the ratio, short positions still maintain a majority of the open positions.

Don’t be fooled by the slow start to the week- the markets are abuzz, carefully monitoring if USD/JPY will finally push above the magic 100 level. The last time the pair was at the three-digit level was in April 2009. The US releases Existing Home Sales later today, so we could see some increased movement from the pair.

USD/JPY Fundamentals

• 12:30 US FOMC Member William Dudley Speaks
• 14:00 US Existing Home Sales. Exp. 5.02M

*Key releases are highlighted in bold

*All release times are GMT

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