USD/JPY – Yen Steady as US Consumer Confidence Improves

USD/JPY is trading quietly in the Tuesday session. In North American trade, the pair is trading at the 112 level. On the release front, there are no Japanese events on the schedule. In the US, CB Consumer Confidence improved to 118.9. On Wednesday, Bank of Japan Governor Haruhiko Kuroda will address the ECB Forum of Central Bankers in Sintra, Portugal.

The Bank of Japan didn’t stray from its message in the Summary of Opinions from its June policy meeting. Policymakers said that inflation would likely remain at low levels for an extensive period, and the bank’s ultra-loose accommodative policy would stay in place until a stronger economy pushed up prices. The BoJ has been consistent in this message, but is mindful that a stronger Japanese economy has increased speculation that the bank might be planning an exit strategy from its stimulus program. In the summary, board members acknowledged that it was important for the BoJ to clearly communicate to the markets that the bank has no plans withdraw monetary stimulus anytime soon. Lower oil prices have contributed to weak inflation levels in Japan, and Governor Kuroda has reiterated that the BoJ will not tighten policy until inflation moves closer to the bank’s target of 2.0%.

Investors are casting a nervous glance at Thursday, when the US releases Final GDP for the first quarter. Preliminary GDP, which was released in May, came in at 1.2%, and this is the forecast for the upcoming GDP report. Recent economic data has been softer than expected, notably construction and manufacturing reports. US durable goods releases were weak in May. Core Durable Goods broke a streak of two straight declines, but the weak gain of 0.1% missed expectations. Durable Goods declined 1.1%, its sharpest decline since June 2016. The slowdown in orders of business equipment could weigh on second quarter growth. Last week, it was the turn of construction numbers to disappoint, as Housing Starts and Building Permits both missed expectations. Consumer spending has also been softer than expected, and if Final GDP falls short of the modest estimate of 1.2%, the dollar could respond with losses.

USD/JPY Fundamentals

Tuesday (June 27)

  • 9:00 US S&P/CS Composite-20 HPI. Estimate 5.9%. Actual 5.7%
  • 10:00 US CB Consumer Confidence. Estimate 116.1. Actual 118.9
  • 10:00 US Richmond Manufacturing Index. Estimate 4 . Actual 7
  • 11:15 US FOMC Member Patrick Harker Speaks
  • 13:00 US Fed Chair Janet Yellen Speaks
  • 17:30 US FOMC Member Neel Kashkari Speaks

Wednesday (June 28)

  • 10:00 US Pending Home Sales. Estimate 0.9%
  • 10:30 US Crude Oil Inventories. Estimate -2.1M

*All release times are GMT

*Key events are in bold

USD/JPY for Tuesday, June 27, 2017

USD/JPY June 27 at 11:10 EDT

Open: 111.88 High: 112.08 Low: 111.47 Close: 112.02

USD/JPY Technical

S3 S2 S1 R1 R2 R3
108.13 109.77 110.94 112.57 113.55 114.37

USD/JPY showed little movement in the Asian session. The pair dropped lower but recovered in European trade. The pair has posted small gains in North American session

  • 110.94 is providing support
  • 112.57 is the next resistance line
  • Current range: 110.94 to 112.57

Further levels in both directions:

  • Below: 110.94, 109.77, 108.13 and 106.68
  •  Above: 112.57, 113.55 and 114.37

OANDA’s Open Positions Ratio

USD/JPY ratio is almost unchanged in the Tuesday session. Currently, long positions have a majority (59%), indicative of trader bias towards USD/JPY continuing to climb to higher levels.

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.