USD/JPY – Steady Ahead of Key Japanese Data

The Japanese yen is calm at the start of the new trading week, as the pair trades in the mid-109 range on Monday. Japan will release three important indicators later in the day – Household Spending, Preliminary Industrial Production and Retail Sales. Any unexpected readings could shake up USD/JPY. Over in the US, today’s highlight is Pending House Sales. After a sharp gain of 3.3% in July, the markets are braced for a sharp downturn, with an estimate of -0.4%.

Japanese inflation releases continue to look strong, as underscored by the August numbers. Tokyo Core CPI, the primary gauge of consumer inflation, posted a strong gain of 2.6%, just shy of the estimate of 2.7%. National Core CPI and the Services Producer Price Index, which measures corporate inflation, also met expectations. The elimination of deflation, which hobbled the Japanese economy for years, has been a key platform for the government and BoE, and this has been largely achieved, as inflation levels have dramatically risen in the past year.

In the US, Core Durable Goods Orders posted a strong gain of +0.7%, bouncing back from the previous reading of -0.8%. Durable Goods Orders continues to take its riders on a roller coaster ride, plunging 18.2% in August, compared to a huge gain of 22.6% a month earlier. Unemployment Claims rose to 293 thousand, within expectations.

USD/JPY for Monday, September 29, 2014

USD/JPY September 29 at 10:35 GMT

USD/JPY 109.37 H: 109.74 L: 109.26

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
106.85 107.68 108.58 109.82 110.68 112.48

 

  • USD/JPY edged higher late in the Asian session, putting pressure on resistance at 109.82. The pair has retracted in the European session.
  • On the downside, 108.58 has some breathing room.
  • 109.82 is an immediate resistance line. 110.68 is next. This line has remained intact since August 2008.
  • Current range: 108.58 to 109.82

Further levels in both directions:

  • Below: 108.58, 107.68, 106.85, 105.44 and 104.17
  • Above: 109.82, 110.68, 112.48, 113.68 and 114.65

 

OANDA’s Open Positions Ratio

USD/JPY ratio has a majority of short positions, indicative of trader bias towards the yen breaking out of range and moving to higher ground.

 

USD/JPY Fundamentals

  • 12:30 US Core PCE Price Index. Estimate 0.0%.
  • 12:30 US Personal Spending. Estimate 0.5%.
  • 12:30 US Personal Income. Estimate 0.3%.
  • 14:00 US Pending Home Sales. Estimate -0.4%.
  • 23:30 Japanese Household Spending. Estimate -3.5%.
  • 23:30 Japanese Unemployment Rate. Estimate 3.8%.
  • 23:50 Japanese Preliminary Industrial Production. Estimate 0.2%.
  • 23:50 Japanese Retail Sales. Estimate 0.4%.

*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.