USD/JPY – Soft Yen Close to 110 After Mixed Japanese Data

The Japanese yen has edged higher on Tuesday, as USD/JPY trades in the mid-109 range in the North American session. On the release front, Japanese numbers were mixed on Monday. Household Spending and Preliminary Industrial Production both posted declines and missed expectations. However, Retail Sales posted a strong gain and climbed to a four-month high. On Tuesday, Average Cash Earnings came in at 1.4%, above the estimate. Later in the day, we’ll get a look at the Tankan indices, which traders should treat as market-movers. In the US, Consumer Index slipped to 86.0 points, short of expectations.

The Japanese yen is within striking distance of the psychological barrier of 110, and mixed Japanese numbers on Monday were of little help to the struggling currency. Japanese Household Spending posted a decline of 4.7%, better than last month but worse than the estimate of -3.5%. Preliminary Industrial Production posted its second decline in three months, with a reading of -1.5%. This was well short of the estimate of +0.2%. On a brighter note, Retail Sales improved to 1.2%, easily beating the estimate of 0.4%. This was the indicator’s best showing in five months.

Over in the US, Pending Home Sales posted a decline of 1.0%, compared to last month’s gain of 3.3%. The important housing indicator has shown strong movement, resulting in readings that have been well off market estimates. US housing indicators continue to paint a mixed picture, as New Home Sales jumped last month, while Existing Home Sales softened and was well short of  expectations.

 

USD/JPY for Tuesday, September 30, 2014

USD/JPY September 30 at 13:25 GMT

USD/JPY 109.72 H: 109.85 L: 109.19

 

USD/JPY Technical

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

 

  • USD/JPY edged lower in the Asian session. The pair reversed directions in European trade and broke through resistance at 109.85 before retracting.
  • 108.58 is providing strong support.
  • On the upside, 109.82 is under strong pressure. 110.68 is stronger. 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 is pointing to gains in long positions on Tuesday. This is consistent with the pair’s movement, as the dollar continues to post gains. The ratio has a majority of short positions, indicative of trader bias towards the yen reversing direction and moving higher.

 

USD/JPY Fundamentals

  • 1:30 Japanese Average Cash Earnings. Estimate 1.1%. Actual 1.4%.
  • 5:00 Japanese Housing Starts. Estimate -13.9%. Actual -12.5%.
  • 13:00 US S&P Composite-20 HPI. Estimate 7.5%.
  • 13:45 US Chicago PMI. Estimate 61.6 points.
  • 14:00 US CB Consumer Confidence. Estimate 92.2 points.

*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.