USD/JPY – Little Movement After Mixed Japanese Data

The Japanese yen continues to show little movement on Friday, as USD/JPY trades in the mid-101 range early in the European session. On the release front, Japanese inflation indicators were solid, but consumer spending and manufacturing data were marked by sharp declines. In the US, GDP posted a rare contraction in Q1. As well, Unemployment Claims were sharp but Pending Home Sales fell short of the estimate. On Friday, there are no major events on the schedule. Today’s highlights are Chicago PMI and  Revised UoM Consumer Sentiment. Japanese Housing Starts posted a second straight decline but managed to beat the estimate.

Thursday was a busy day in both Japan and the US. Japanese inflation indicators were solid, as Tokyo Core CPI gained 2.8% and National Core CPI soared 3.1%, its highest reading since February 1991. The news was not as positive in other sectors, as Household Spending dropped by -4.6%, and Preliminary Industrial Production came in at -2.5%. Both of these releases fell short of their estimates.

Meanwhile, Thursday’s US numbers were mostly a disappointment. Preliminary GDP, the primary gauge of economic activity, posted its first decline since Q2 of 2009. The indicator came in at -1.0% for Q1, worse than the estimate of -0.6%. Harsh winter conditions took their toll on the US economy in Q1, and analysts expect a rebound in Q2. After a strong gain in March, Pending Home Sales softened, coming in at 0.4%. This was nowhere near the gain of 1.1%. On a brighter note, Employment Claims dropped to 300 thousand, easily beating the estimate of 321 thousand

 

USD/JPY for Friday, May 30, 2014

 

USD/JPY May 30 at 11:30 GMT

USD/JPY 101.66 H: 102.74 L: 101.50

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
99.57 100.00 101.19 102.53 103.07 104.17

 

  • USD/JPY is showing little activity on Friday.
  • 102.53 is a strong line of resistance.
  • 101.19 is providing support. The key level of 100.00 is stronger.
  • Current range: 101.19 to 102.53

Further levels in both directions:

  • Below: 101.19, 100.00, 99.57 and 98.97.
  • Above: 102.53, 103.07, 104.17 and 105.70.

 

OANDA’s Open Positions Ratio

USD/JPY ratio is almost unchanged in Friday trading, continuing the trend seen a day earlier. This is consistent with the lack of movement from the pair. The ratio is made up of a majority of long positions, indicating trader bias towards the dollar breaking out and moving upwards.

USD/JPY is listless on Friday. The pair is unchanged in the European session.

 

USD/JPY Fundamentals

  • 5:00 Japanese Housing Starts. Estimate -8.2%. Actual -3-3%.
  • 12:30 US Core PCE Price Index. Estimate 0.2%.
  • 12:30 US Personal Spending. Estimate 0.2%.
  • 12:30 US Personal Income. Estimate 0.3%.
  • 13:45 US Chicago PMI. Estimate 60.8 points.
  • 13:55 Revised UoM Consumer Sentiment. Estimate 82.9 points.
  • 21:00 US FOMC Member Charles Plosser Speaks.

*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.