USD/JPY – Yen Steady as Japanese Inflation Improves

USD/JPY is almost unchanged in the Monday session. Currently, the pair is trading at 114.70. In Japan, PPI climbed to 1.0%, matching the forecast. This marked a second straight gain after a long string of declines. Core Machinery Orders disappointed with a sharp decline of 3.2%, well short of the forecast of 0.0%. In the US, there is one minor event on the schedule. On Tuesday, the US releases PPI, with the index expected to slip to 0.1%.

Japanese manufacturing numbers were mixed last week. After over a year of declines, Preliminary Machine Tool Orders has posted two straight gains, including a strong gain of 9.1% in February. The BSI Manufacturing Index, based on a survey of large manufacturers, disappointed in the first quarter, dropping to 1.1 points. The markets had predicted a much stronger reading of 8.4 points.

The US economy continues to steam ahead at full speed, buoyed by a red-hot labor market. On Friday, Nonfarm Payrolls sparkled with a gain of 235 thousand. This easily beat the estimate of 196 thousand. The strong release makes it a virtual certainty that the Fed will raise rates by a quarter-point on Wednesday. Although a rate hike has been priced in by the markets, there have been disappointments in the past, so a rate move will likely give the dollar a boost against its major rivals, such as the euro. The solid job numbers also give President Trump a much-needed boost. Trump is under pressure to present an economic agenda, but the markets won’t mind giving him some additional breathing room with the economy performing well.

USD/JPY Fundamentals

Sunday (March 12)

  • 19:50 Japanese Core Machinery Orders. Estimate 0.0%. Actual -3.2%
  • 19:50 Japanese PPI. Estimate 1.0%. Actual 1.0%.

Monday (March 13)

  • 00:30 Japanese Tertiary Industry Activity. Estimate 0.2%. Actual 0.0%
  • 10:00 US Labor Market Conditions Index

Upcoming Key Events

Tuesday (March 14)

  • 8:30 US PPI. Estimate 0.1%

*All release times are GMT

*Key events are in bold

 

USD/JPY for Monday, March 13, 2017

USD/JPY March 13 at 9:50 EST

Open: 114.72 High: 114.92 Low: 114.48 Close: 114.73

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
110.94 112.57 113.80 114.83 115.90 116.88

USD/JPY edged lower in the Asian session but recovered in European trade. The pair is steady in North American trade

  • 113.80 is providing support
  • 114.83 was tested in resistance earlier and is a weak line
  • Current range: 113.80 to 114.83

Further levels in both directions:

  • Below: 113.80, 112.57, 110.94, and 109.77
  •  Above: 114.83, 115.90 and 116.88

OANDA’s Open Positions Ratio

In the Monday session, USD/JPY ratio is showing long positions with a slender majority (52%), indicative of slight trader bias towards USD/JPY breaking out and moving higher.

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.