USD/JPY – Steady as Japanese Inflation, Retail Sales Numbers Meet Expectations

USD/JPY is stable on Friday, as the pair trades in the low-118 range. Japan released a host of data on Thursday, as consumer spending and inflation releases met expectations. On Friday, Japanese Housing Starts declined but beat the estimate. There are no US releases on Friday, following the Thanksgiving holiday on Thursday.

Japan released a batch of events on Thursday, and most were very close to their estimates. Tokyo Core CPI, the most important inflation index, dipped for the fourth straight month, coming in at 2.4%. Still, this was good enough to edge above the estimate of 2.5%. Retail Sales posted a gain of 1.4%, just shy of the forecast of 1.5%. Preliminary Industrial Production fell to just 0.2%, but this beat the estimate of -0.4%. Household Spending came in at -4.0%, its seventh straight decline. This beat the estimate of -4.8%.

The Japanese yen continues to trade at low levels, and BoJ Governor Haruhiko Kuroda addressed this earlier in the week, 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 in October. 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 and continues to trade at low levels against the dollar.

USD/JPY for Friday, November 28, 2014

USD/JPY November 28 at 11:35 GMT

USD/JPY 118.19 H: 118.34 L: 117.86

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
115.75 116.66 117.94 118.89 119.93 120.63

 

  • USD/JPY has posted gains in the Asian session, breaking above resistance at 117.74. The pair is almost unchanged in European trade.
  • 117.94 was breached and has reverted to a support role. 116.66 is stronger.
  • 118.89 is an immediate resistance line.
  • Current range: 117.94 to 118.89

Further levels in both directions:

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

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in long positions on Friday. This is consistent with the movement we are seeing from the pair, as the dollar has posted small gains. 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 Housing Starts. Estimate -14.4%. Estimate -12.3%.

*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.