USD/JPY – Yen Subdued in Light Holiday Trade

USD/JPY is showing limited movement on Monday, as the pair trades at the 117 line. On the release front, there are no Japanese releases, as markets in Japan are closed for a holiday. There are no major US releases on the schedule. On Tuesday, the key is event is JOLTS Job Openings, which is expected to climb to 5.59 million.

The US released key employment numbers on Friday, and the markets responded with a thumbs-up, which boosted the US dollar. Wages rebounded in December, as Average Hourly Earnings climbed 0.4%, edging above the estimate of 0.3%. This marked a strong turnaround after the November reading of -0.1%. The news was not as bright from Nonfarm Payrolls, which dropped to 156 thousand, well off the estimate of 175 thousand. This marked a 3-month low, but the dollar still posted gains. The unemployment rate edged up to 4.7%, matching the forecast.

The US dollar was broadly lower on Thursday, after the Federal Reserve released the minutes of its December meeting. The minutes were cautious in tone, with Fed policymakers essentially saying that monetary policy in the coming months will be dictated in large part by the economic platform of the incoming Trump administration, which remains unclear. FOMC members expressed concern about higher inflation levels, given the “prospects for more expansionary fiscal policies in the coming years”. This is a clear reference to president-elect Trump’s plans to increase fiscal spending and cut taxes, which would likely result in higher inflation, something the US hasn’t had to deal with in years. Still, policymakers haven’t changed their view that gradual rate hikes remains an appropriate monetary policy. Many analysts are predicting another rate hike in June, but this forecast could easily change, depending on the performance of the US economy in the first half of 2017.

Monday (January 9)

  • 10:00 US Labor Market Conditions Index
  • 15:00 US Consumer Credit. Estimate 18.3B

Tuesday (January 10)

  • 10:00 US JOLTS Job Openings. Estimate 5.59M

*All release times are GMT

*Key events are in bold

USD/JPY for Monday, January 9, 2017

USD/JPY January 9 at 6:50 EST

Open: 117.14 High: 117.53 Low: 116.83 Close: 116.73

USD/JPY Technical

S3 S2 S1 R1 R2 R3
113.80 114.83 115.88 116.88 118.05 118.85
  • USD/JPY posted gains in the Asian session but has retracted in European trade
  • 115.88 is providing support
  • 116.88 is fluid. Currently, it is a weak resistance line
  • Current range: 115.88 to 116.88

Further levels in both directions:

  • Below: 115.88, 114.83 and 113.80
  •  Above: 116.88, 118.05, 118.85 and 119.83

OANDA’s Open Positions Ratio

In the Monday session, USD/JPY ratio is showing short positions with a majority (58%). This is indicative of trader bias towards USD/JPY continuing to move to lower ground.

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.