USD/JPY – Dollar Flirts With 111 as Yen Under Pressure

USD/JPY has posted small losses on Monday. Currently, the pair is trading at 110.70. On the release front, there are no US events on the schedule. In Japan, the trade surplus jumped to JPY 0.47 trillion, beating expectations. All Industries Activity remained unchanged at 0.2 percent.

The Japanese currency continues to lose ground against the US dollar. Last week, USD/JPY climbed 2.7 percent, and has surged 5.9 percent since November 7, just prior to the US election. Earlier on Monday, USD/JPY climbed above the 111 level for the first time since the end of May. On Sunday, Japan’s trade balance climbed to JPY 0.47 trillion, beating the forecast of JPY 0.41 trillion. This was the indicator’s largest surplus since February 2015.

USD/JPY posted sharp gains on Thursday, following Fed Chair Yellen’s appearance before a congressional committee. Yellen did not explicitly acknowledge that the Fed would raise rates at the December 13-14 policy meeting, but she did say that the rate hike would be “relatively soon”. Yellen make no mention of Donald Trump’s potential policies, which could include greater fiscal spending, as she reiterated that future rate hikes should be “gradual”. The odds of a rate hike next month currently stand at 95 percent. Commenting on Yellen’s testimony, Jonathan Wright, a former Fed economist, summed up market sentiment –  “a rate hike in December is a done deal, barring a significant surprise in the next jobs numbers or in financial markets”.

USD/JPY Fundamentals

Sunday (November 20)

  • 18:50 Japanese Trade Balance. Estimate 0.41T. Actual 0.47T
  • 23:50 Japanese All Industries Activity. Estimate 0.1%. Actual 0.2%

Monday (November 21)

  • There are no Japanese or US releases on Monday

*All release times are EST

*Key events are in bold

USD/JPY for Monday, November 21, 2016

USD/JPY November 21 at 11:45 EST

Open: 110.94 High: 111.18 Low: 110.54 Close: 110.69

USD/JPY Technical

S3 S2 S1 R1 R2 R3
108.61 109.47 110.68 111.45 112.48 113.86
  • USD/JPY was flat in the Asian session and has posted slight losses in European trade
  • 110.68 was tested in support earlier and is a weak line
  • There is resistance at 111.45
  • Current range: 110.68 to 111.45

Further levels in both directions:

  • Below: 110.68, 109.47, 108.61 and 107.49
  •  Above: 111.45, 112.48 and 113.86

OANDA’s Open Positions Ratio

USD/JPY ratio is unchanged in the Monday session. Currently, short positions have a majority (57%), indicative of trader bias towards USD/JPY continuing to move lower.

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.