USD/JPY – Little Movement Ahead of Key US Data

USD/JPY continues to trade close to the 105 line on Thursday. The Bank of Japan minutes indicated that no change is planned to its current monetary stimulus program. In the US, we’ll get a look at two key employment releases – ADP Nonfarm Payrolls and Unemployment Claims. As well, US Trade Balance and the ISM Non-Manufacturing PMI will be released later in the day.

With Japanese data looking steady in recent readings, the markets did not expect any surprises from the BOJ minutes, and the central bank obliged. Policymakers were unanimous in the decision to maintain monetary stimulus at 60-70 trillion yen each year. The BOJ remains cautiously optimistic about the economy, which has performed well despite the sales tax hike in April.

Despite the fact that recent Japanese data has been solid, the yen has been unable to hold its ground against the dollar, thanks to excellent US numbers. On Tuesday, ISM Manufacturing PMI impressed the markets, climbing to 59.0 points, its best showing since April 2011. The index easily beat the estimate of 57.0 points. The strong showing follows an unexpectedly strong GDP, which hit 4.2% in Q2. With the US economy moving forward at a fast clip, the US dollar has taken full advantage and has made broad gains this week against its major rivals. US employment data will be in the spotlight for the remainder of the week, with the release of ADP Nonfarm Payrolls later on Thursday, followed by the official Nonfarm Payrolls and the unemployment rate on Friday.

 

USD/JPY for Thursday, September 4, 2014

USD/JPY September 4 at 11:05 GMT

USD/JPY 104.98 H: 105.01 L: 104.76

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
102.53 103.07 104.17 105.44 106.85 107.68

 

  • USD/JPY is showing little movement as the pair stays close to the 105 line.
  • 104.17 is providing support.
  • 105.44 is an immediate resistance line. There is stronger resistance at 106.85.
  • Current range: 104.17 to 105.44

Further levels in both directions:

  • Below: 104.17, 103.07, 102.53 and 101.19
  • Above: 105.44, 106.85, 107.68 and 108.57

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in long positions on Thursday. This is consistent with the pair’s current movement, as the yen has posted small gains. The ratio has a majority of short positions, indicative of trader bias towards the yen moving higher.

 

USD/JPY Fundamentals

  • 3:07 BOJ Monetary Policy Statement.
  • 6:31 BOJ Press Conference.
  • 11:30 US Challenger Job Cuts. Actual -20.7%.
  • 12:15 US ADP Non-Farm Employment Change. Estimate 218K.
  • 12:30 US Trade Balance. Estimate -42.5B.
  • 12:30 US Unemployment Claims. Estimate 298K.
  • 12:30 US Revised Nonfarm Productivity. Estimate 2.5%.
  • 12:30 US Revised Unit Labor Costs. Estimate 0.6%.
  • 13:45 US Final Services PMI. Estimate 58.5 points.
  • 14:00 US ISM Nonfarm Manufacturing PMI. Estimate 57.3 points.
  • 14:30 US Natural Gas Storage. Estimate 72B.
  • 15:00 US Crude Oil Inventories. Estimate -0.9M.
  • 16:30 US FOMC Member Loretta Mester Speaks.
  • 23:00 US FOMC Member Jerome Powell 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.