USD/JPY – Steady as Japan, US Post Solid Data

USD/JPY is steady on Friday, as the pair trades in the high 101-range in the North American session. On the release front, Japanese inflation numbers, released late Thursday, looked solid in June and met expectations. In the US, Core Durable Goods posted a strong gain and climbed to a three-month high. There are no Japanese releases on Friday.

The US ended the week on a high note, courtesy of strong data from the manufacturing sector. Core Durable Goods Orders jumped 0.8%, beating the estimate of 0.6%, and rebounding nicely from a decline of 0.1% in May. Durable Goods Orders followed suit, posting a gain of 0.7%, compared to a weak reading of -1.0% last month. This easily surpassed the estimate of 0.4%. Unemployment Claims tumbled last week, as the key indicator fell to 284 thousand, its lowest level since February 2008. This surprised the markets, which had expected a reading of 310 thousand. The strong release continues a string of solid employment data, which has helped the dollar. As well, positive news on the employment front is bound to increase speculation about a rate increase by the Federal Reserve.

In Japan, there was more positive news from inflation indicators. Tokyo Core CPI led the way with a gain of 2.8%, edging above the estimate of 2.7%. National Core CPI and the Corporate Services Price Index both posted gains above 3% in June. The fight against inflation, a major component of the country’s monetary policy, has become a success story for the government and Bank of Japan., Deflation has been wiped out after hobbling the economy for some 15 years, and inflation levels continue to rise.

 

USD/JPY for Friday, July 25, 2014

USD/JPY July 25 at 15:05 GMT

USD/JPY 101.80 H: 101.94 L: 101.71

 

USD/JPY Technical

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

 

  • USD/JPY edged higher late in the Asian session. The pair was almost unchanged in European trading and has edged lower in North American trading.
  • 102.53 continues to provide resistance.
  • 101.19 is a strong support level.
  • 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 has posted gains in short positions in Friday trade. This is not consistent with the movement of the pair, as the dollar has posted small gains. The ratio is made up of a large majority of long positions, indicating strong trader bias towards the dollar continuing to move to higher ground.

 

USD/JPY Fundamentals

  • 23:30 Japanese Tokyo Core CPI. Estimate 2.7%. Actual 2.7%.
  • 23:30 Japanese National Core CPI. Estimate 3.3%. Actual 3.3%.
  • 23:50 Japanese Corporate Services Price Index. Estimate 3.6%. Actual 3.6%.
  • 12:30 US Core Durable Goods Orders. Estimate 0.6%. Actual 0.8%
  • 12:30 US Durable Goods Orders. Estimate 0.4%. Actual 0.7%.

* Japanese readings were released on Thursday, July 24

* 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.