USD/JPY – Calm Ahead of Japanese Inflation Data

USD/JPY is stable on Thursday, as the pair trades in the mid-117 range. On the release front, US markets are closed for the Thanksgiving holiday, so traders can expect light trading during the North American session. Later in the day, Japan will release a host of data, highlighted by Tokyo CPI, Retail Sales, and Preliminary Industrial Production.

The Japanese yen continues to trade at low levels, and BoJ Governor Haruhiko Kuroda addressed this on Tuesday, noting that the soft yen was having a negative effect on the Japanese economy. The yen received a boost after the BoJ minutes showed that some policymakers opposed the BoJ’s decision to expand its stimulus program last month. At that time, the BoJ shocked the markets when it increased its government debt purchases from JPY 60-70 trillion to 80 trillion per year. The yen reacted by dropping sharply against the dollar, falling to 7-year lows.

The US released a host of key data on Wednesday and the numbers were weak across-the-board. Unemployment Claims jumped to 313 thousand, its highest level since mid-September. Core Durable Goods Orders declined 0.9%, its third decline in four readings. The estimate stood at 0.5%. New Home Sales fell to a 3-month low, dropping to 458 thousand. This was short of the estimate of 471 thousand. Pending Home Sales was no better, declining by 1.1%, well off the estimate of 0.9%. There was better news from UoM Consumer Sentiment, which posted a fourth straight gain, rising to 88.8 points. However, this was short of the estimate of 90.2 points.

USD/JPY for Thursday, November 27, 2014

USD/JPY November 27 at 14:00 GMT

USD/JPY 117.56 H: 117.69 L: 117.24

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
114.65 115.75 116.66 117.94 118.89 119.93

 

  • USD/JPY posted slight losses in the Asian session. The pair has not shown much movement in European trade.
  • 117.94 is a weak resistance line. 118.89 is stronger.
  • 116.66 is providing strong support.
  • Current range: 116.66 to 117.94

Further levels in both directions:

  • Below: 116.66, 115.75, 114.65 and 113.68
  • Above: 117.94, 118.89, 119.83, 120.63 and 121.39

 

OANDA’s Open Positions Ratio

USD/JPY ratio is almost unchanged on Thursday, continuing the trend we saw a day earlier. This is consistent with the lack of movement we are seeing from the pair. The ratio has a majority of long positions, indicative of trader bias towards the dollar moving to higher ground.

USD/JPY Fundamentals

  • 23:30 Japanese Household Spending. Estimate -4.8%.
  • 23:30 Japanese Tokyo Core CPI. Estimate 2.3%.
  • 23:30 Japanese National Core CPI. Estimate 2.9%.
  • 23:30 Japanese Unemployment Rate. Estimate 3.6%.
  • 23:50 Japanese Preliminary Industrial Production. Estimate -0.4%.
  • 23:50 Japanese Retail Sales. Estimate 1.5%.

*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.