USD/JPY – Steady As BOJ Holds The Course

USD/JPY is steady in Tuesday trading, as the pair trades slightly above the 103 line in the European session. In economic news, the Bank of Japan said it was continuing its current monetary policy. In the US, today’s highlight is JOLTS Job Openings. The markets are not expecting much change from last month’s numbers.

There were no surprises from the BOJ, which released its Monetary Policy Statement on Tuesday. The BOJ said it would continue to expand monetary policy by 60-70 trillion each year. The Bank sounded optimistic about the economy, noting that economic growth and inflation are in line with its forecasts.

Japanese Current Account weakened in February, as the deficit ballooned to -$0.59 trillion, up from -$0.20 trillion a month earlier. This matched the estimate. GDP travelled a similar route, dropping to 0.2% in February, down from 0.3% a month earlier. This was the lowest reading since Q4 of 2012, although it too matched the forecast. The yen did not react to these readings, and continues to trade above the 103 line.

US Nonfarm Payrolls was a pleasant surprise on Friday, as the key employment release jumped to 175 thousand in February, up from 113 thousand a month earlier. This was well above the estimate of 151 thousand. The Unemployment rate edged up to 6.7%, slightly above the estimate of 6.6%. With a solid Unemployment Claims earlier last week, the markets can breathe more comfortably as the Fed is likely to take its scissors and trim QE next week for the third time. New York Fed President William Dudley stated last week that the threshold to alter the Fed’s program to wind up QE was “pretty high”. In other words, short of a serious economic downturn in the US economy, we can expect the QE tapers to continue.

 

USD/JPY for Tuesday, March 11, 2014

Forex Rate Graph 21/1/13

USD/JPY March 11 at 14:40 GMT

USD/JPY 103.28 H: 103.42 L: 103.19

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
100.00 101.19 102.53 103.30 104.17 105.70

 

  • The pair is testing resistance at 103.30. This line was briefly breached earlier today. This is followed by 104.17, which has remained intact since late January.
  • 102.53 is providing strong support. The next support level is at 101.19.
  • Current range: 102.53 to 103.30

 

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

Short positions make up slightly more than half of the open positions in the ratio, indicating a weak trader bias towards the dollar moving higher.

USD/JPY continues to trade at high levels. The pair is showing little movement in the European session.

 

USD/JPY Fundamentals

  • 3:00 Bank of Japan Monetary Policy Statement.
  • 6:00 Japanese Preliminary Machine Tool Orders. Actual 26.0%.
  • 7:26 Bank of Japan Press Conference.
  • 11:30 US NFIB Small Business Index. Estimate 95.3 points. Actual 91.4 points.
  • 14:00 US JOLTS Jobs Openings. Estimate 4.02M.
  • 14:00 US Wholesale Inventories. Estimate 0.5%.

*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.