USD/JPY – Yen Steady, US Inflation Data Disappoints

USD/JPY is showing little movement in the Thursday session, as the pair trades just above the 109 line in the North American session. In economic news, there are no major Japanese events on the schedule. In the US, key numbers were mixed. PPI came in at -0.1%, missing the estimate of 0.0%. There was better news from unemployment claims, which remained unchanged at 234 thousand, beating the estimate of 242 thousand. Later in the day, the US releases UoM Consumer Sentiment, which is expected to drop to 97.1 points. On Friday, the US releases consumer spending and inflation numbers.

U.S. Producer Prices Decline for First Time Since August 2016

U.S. Jobless Claims Unexpectedly Fall as Labor Market Remains Firm

The yen improved to 5-month highs this week, as jittery investors have moved away from the US dollar in favor of the safe-haven Japanese yen. Escalating geopolitical concerns, particularly over Syria and North Korea, are weighing on the US dollar. The US bombed a Syrian military base last week, in response to a chemical attack by Syrian warplanes. Russia has strongly condemned the US move, chilling relations even further between the US and Russia. President Trump has declared that he has sent “an armada” to the Korean peninsula in response to North Korea firing ballistic missiles, and the escalation in rhetoric between North Korea has unnerved the markets. Also, Donald Trump said in a newspaper interview that the value of the US dollar was too strong and that he was in favor of a low interest rate policy. Trump’s comment has further weighed on the greenback and boosted the yen.

Earlier this week, Federal Reserve Chair Janet Yellen said that with the economy close to full employment and 2 percent inflation, the Fed was in a better position to reduce its support for the US economy. The minutes of the March meeting indicated that the Fed plans to trim the $4.5 trillion balance sheet, which has ballooned as a result of the huge asset-purchase program which started in response to the financial crisis in 2008. Yellen emphasized that the Fed’s policy stance is neutral, as interest rate increases will be gradual, given that the economy is growing at a moderate pace. The Fed is widely expected to raise rates twice more in 2017, with the next rate expected in June. At the same time, some Fed policymakers are in favor of three more rate hikes, which would bring the total this year to four moves.

 

USD/JPY Fundamentals

Wednesday (April 12)

  • 7:50 Japanese Money Supply M2. Actual 4.3%

Thursday (April 13)

  • 8:30 US PPI. Estimate 0.0%. Actual -0.1%
  • 8:30 US Unemployment Claims. Estimate 242K. Actual 232K
  • 8:30 US Core PPI. Estimate 0.2%. Actual 0.0%
  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 97.1
  • 10:00 US Preliminary UoM Inflation Expectations
  • 10:30 US Natural Gas Storage. Estimate 5B

Friday (April 14)

  • 8:30 US CPI. Estimate 0.0%
  • 8:30 US Core CPI. Estimate 0.2%
  • 8:30 US Core Retail Sales. Estimate 0.2%
  • 8:30 US Retail Sales. Estimate 0.1%

*All release times are GMT

*Key events are in bold

USD/JPY for Thursday, April 13, 2017

USD/JPY April 13 at 9:35 EST

Open: 108.89 High: 109.29 Low: 108.72 Close: 109.11

USD/JPY Technical

S3 S2 S1 R1 R2 R3
106.14 107.49 108.54 109.77 110.94 112.57

USD/JPY was flat in the Asian session. The pair edged higher in European trade and is steady in North American trade

  • 108.54 is providing support
  • 109.77 is under pressure in resistance
  • Current range: 108.54 to 109.77

Further levels in both directions:

  • Below: 108.54, 107.49 and 106.14
  •  Above: 109.77, 110.94, 112.57 and 113.80

OANDA’s Open Positions Ratio

USD/JPY is unchanged in the Thursday session, as long positions have a solid majority (63%). This is indicative of trader bias towards USD/JPY continuing to move upwards.

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.