USD/JPY – Yen Rebounds As Markets Eye Fed Minutes

The Japanese yen has started off the week strongly as USD/JPY is back below the 100 level. The yen continues to put pressure on the dollar, as the pair trades in the high-99 range in Tuesday trading. In economic news, Tuesday has a light schedule, with just one data release out of the US. Today’s highlights include speeches by US Treasury Jack Lew and two FOMC members. In Japan, Tuesday’s sole release is Trade Balance. The markets are expecting a smaller deficit for October.

On Wednesday, the Federal Reserve will release the minutes of its most recent policy meeting. This event is a market-mover and analysts will be paying close attention to the minutes, especially regarding QE. The markets are expecting the Fed to hold off from tapering in December, as US numbers are still not as strong as the Fed would like. Market sentiment is leaning towards the Fed sticking to its present monetary policy, and any surprises in the minutes would likely shake up USD/JPY.

Late last week, Federal Reserve chair-elect Janet Yellen testified before the powerful Senate Banking Committee. Yellen has been an ardent supporter of QE, and told the committee that the present level of asset purchases should continue until growth improves and unemployment falls. She said that the labor market and economy are performing “far short of their potential”, but added that she expects inflation to remain below the Fed’s target of 2%. Yellen, who is slated to become the first woman to head the Federal Reserve, will take over from Bernard Bernanke in January.

USD/JPY for Tuesday, November 19, 2013

USD/JPY November 19 at 13:00 GMT

USD/JPY 99.84 H: 99.95 L: 99.57

USD/JPY Technical

• USD/JPY is showing little movement in Tuesday trading. The pair touched a low of 99.57 in the Asian session.
• On the upside, the key level of 100.00 has reverted to a resistance role. This weak line could see pressure if the US dollar shows any strength. There is stronger resistance at 101.19.
• The pair is receiving support at 98.92. This is followed by a support level at 98.15.
• Current range: 98.92 to 100.00

Further levels in both directions:

• Below: 98.92, 98.15, 97.18 and 96.00
• Above: 100.00, 101.19, 102.53, 103.30 and 104.17

OANDA’s Open Positions Ratio

USD/JPY ratio is unchanged in Tuesday trading. This is reflected in the current movement of the pair, which has settled down and is showing little movement. Long positions retain a slight majority, indicative of a trader bias towards the US dollar resuming the upward movement we saw last week and posting gains at the expense of the yen.

The pair is trading close to the 100 level and we could see USD/JPY continue to trade in this range during the North American session.

USD/JPY Fundamentals

•  13:30 US Employment Cost. Estimate 0.5%.
• 13:45 US Treasury Secretary Jack Lew Speaks.
• 15:00 FOMC Member William Dudley Speaks.
• 19:15 FOMC Member Charles Evans Speaks.
• 20:00 President Barack Obama Speaks.
• 23:50 Japanese Trade Balance. Estimate -0.88T

*Key releases are highlighted in bold

*All release times are GMT

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