USD/JPY – Yen Under Pressure Following Mixed Tankan Releases

USD/JPY remains firm as the pair trades in the mid-103 range in Tuesday’s European session. The retreating yen has coughed up about 150 pips in less than a week. In economic news, Japanese Tankan indexes posted mixed results. In the US, today’s key event is ISM Manufacturing PMI.

Japanese Tankan indexes are important indices which provide a glimpse of the health of the Japanese economy. The releases were a mix in Q1, and the yen did not show much reaction. The Manufacturing Index rose slightly to 17 points, falling short of the estimate of 19 points. However, the Non-Manufacturing Index showed a significant upturn, jumping to 24 points from 20 points, matching the forecastOn Monday, Preliminary Industrial Production starting off the week with a whimper, declining 2.3% in February, an eight-month low.

On Monday, Fed chair Janet Yellen said that “considerable slack” remained in the US economy and this would require further stimulus measures. Currently, the Fed is purchasing $55 billion in assets under its QE scheme. There have been three tapers to QE so far, and Yellen plans to wind up the program in the fall, provided that the US economy does not run into any serious turbulence. At the same time, the Federal Reserve has stated that it has no plans to raise interest rates until sometime in 2015.

 

USD/JPY for Tuesday, April 1, 2014

Forex Rate Graph 21/1/13

USD/JPY April 1 at 13:30 GMT

USD/JPY 103.35 H: 103.41 L: 103.09

USD/JPY Technical

S3 S2 S1 R1 R2 R3
101.19 102.53 103.30 104.17 105.70 106.85
  • USD/JPY is firm in Tuesday trade. The pair touched a high of 103.41 in the European session.
  • 104.17 is the next resistance line. This is followed by 105.70, which has not been tested since October 2008.
  • On the downside, 103.30 remains under strong pressure. The next support line is 102.53.
  • Current range: 103.30 to 104.17

Further levels in both directions:

  • Below: 103.30, 102.53, 101.19, 100.00 and 99.57
  • Above: 104.17, 105.70, 106.85 and 107.80.

OANDA’s Open Positions Ratio

USD/JPY ratio is showing gains in short positions on Tuesday, continuing the trend we have seen since last week. This is not consistent with the pair’s movement, as the dollar has posted slight gains. Long positions make up a majority of the open positions in the ratio, indicating trader bias towards the dollar continuing to move higher.

USD/JPY remains at high levels, trading above the 103 line. The pair is steady in the European session.

USD/JPY Fundamentals

  • 1:30 Japanese Average Cash Earnings. Estimate -0.1%. Actual 0.0%.
  • 3:45 Japanese 10-year Bond Auction. Actual 0.63%.
  • 13:45 US Final Manufacturing PMI. Estimate 55.9 points.
  • 14:00 US ISM Manufacturing PMI. Estimate 54.2 points.
  • 14:00 US Construction Spending. Estimate 0.2%.
  • 14:00 US IBD/TIPP Economic Optimism. Estimate 46.3 points.
  • 14:00 US ISM Manufacturing Prices. Estimate 59.2 points.
  • All Day – US Total Vehicle Sales. Estimate 15.8M.

*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.