USD/JPY – Yen Loses Ground As Wage Data Weakens

The Japanese yen has posted losses in Tuesday trading, as USD/JPY trades in the high-101 range. In economic news, Japanese Average Cash Earnings disappointed, dropping to a five-month low. There is just one minor release out of the US on Tuesday.

Japanese releases looked strong last week, helping the yen push lower against the dollar. Capital Spending sported a strong gain of 4.0%, which was an eight-month high. However, the markets were looking for more, with an estimate of 5.1%. This follows some positive news late last week. Tokyo Core CPI continues to rise and posted a respectable gain of 0.9%, edging above the estimate. Household Spending climbed 1.1% while Retail Sales jumped 4.4%, as both easily beat their estimates. Not to be outdone, Preliminary Industrial Production shot up 4.0%, its best showing since May 2011.

After a less than stellar week, US releases started the new trading week on a positive note. ISM Manufacturing PMI improved to 53.2 points in January, beating the estimate of 52.3. On Friday, Pending Home Sales posted a paltry gain of 0.1%, well below the estimate of a 2.9% gain. However, the reading was a strong improvement over the January reading of -8.7%. Earlier in the week, Unemployment Claims came in above the estimate and GDP also missed the forecast. Although market sentiment remains positive about the US economy, recent key releases have not impressed, and the dollar will find itself under pressure this week if US numbers don’t show improvement.

 

USD/JPY for Tuesday, March 4, 2014

Forex Rate Graph 21/1/13

USD/JPY March 4 at 13:25 GMT

USD/JPY 101.83 H: 101.95 L: 101.42

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
99.57 100.00 101.19 102.53 103.30 104.17

 

  • USD/JPY has moved higher in Tuesday trade. The pair touched a high of 101.95 late in the Asian session.
  • 102.53 is the first resistance line. There is stronger resistance at 103.30.
  • 101.19 is providing support. Next is the key level of 100.00, which has remained intact since November.
  • Current range: 101.19 to 102.53

 

Further levels in both directions:

  • Below: 101.19, 100.00, 99.57 and 98.65
  • Above: 102.53, 103.30, 104.17, 105.70, 106.85

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in short positions in Tuesday trading. This is not consistent with what we are seeing from the pair, as the dollar has posted gains. Long positions continue to comprise a solid majority in the USD/JPY ratio, indicating trader bias towards the dollar continuing to move higher against the yen.

The yen is under pressure in Tuesday trading and we could see USD/JPY push across the 102 line during the day. The pair is steady in the European session.

 

USD/JPY Fundamentals

  • 1:30 Japanese Average Cash Earnings. Estimate 0.3%. Actual -0.2%.
  • 15:00 US IBP/TIPP Economic Optimism. Estimate 45.6 points.

*Key releases are highlighted in bold

*All release times are GMT

 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

 

 

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.