USD/JPY – Steady as Japanese Retail Sales Misses Expectations

The Japanese yen is almost unchanged on Thursday. Early in the North American session, USD/JPY is trading just shy of the 118 line. On the release front, Japanese Retail Sales posted a weak gain of 0.2%, well short of expectations. Later in the day, Japan will release Tokyo Core CPI as well as consumer spending and manufacturing reports. In the US, Unemployment Claims sparkled, dropping to 265 thousand.

US employment numbers have improved as the economy chugs along. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. On Wednesday, the Federal Reserve reiterated that it would be “patient” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed gave a vote of confidence to the US economy, noting that the economy was expanding at a “solid pace”. The markets expect the Fed to raise rates sometime during the year, so the “Fed rate watch” is sure to continue, as the markets look for clues as to when the Fed will make a move.

Japanese Retail Sales, the primary gauge of retail sales, disappointed in December. The indicator posted a small gain of 0.2%, well below the forecast of 1.1%. This is also marked a 6-month low, underscoring weak economic activity. Tokyo Core CPI is expected to continue to soften, with the estimate standing at 2.2%.

USD/JPY for Thursday, January 29, 2015

USD/JPY January 29 at 13:50 GMT

USD/JPY 117.97 H: 118.19 L: 117.56

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
115.56 116.69 117.49 118.69 119.83 120.63

 

  • USD/JPY has been marked by choppy trading on Thursday, as the pair is almost unchanged on the day.
  • 118.69 remains immediate resistance line.
  • 117.49 is providing weak support. 116.69 is stronger.
  • Current range: 117.49 to 118.69

Further levels in both directions:

  • Below: 117.49, 116.69, 115.56, 113.64 and 112.41
  • Above: 118.69, 119.83, 120.63 and 121.69

 

OANDA’s Open Positions Ratio

USD/JPY ratio is almost unchanged on Thursday. This is consistent with the pair’s lack of movement. The ratio currently has a majority of long positions, indicative of trader bias towards the US dollar moving to higher ground.

USD/JPY Fundamentals

  • 13:30 US Unemployment Claims. Estimate 301K. Actual 265K.
  • 15:00 US Pending Home Sales. Estimate 0.6%.
  • 15:30 US Natural Gas Storage. Estimate -113B.
  • 23:30 Japanese Household Spending. Estimate -2.3%.
  • 23:30 Japanese Tokyo Core CPI. Estimate 2.2%.
  • 23:30 Japanese National Core CPI. Estimate 2.6%.
  • 23:30 Japanese Unemployment Rate. Estimate 3.5%.
  • 23:50 Japanese Preliminary Industrial Production. Estimate 1.3%.

*Key releases are highlighted in bold

*All release times are GMT

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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.