USD/JPY – Dollar Rise Continues As BOJ Stands Pat

USD/JPY has posted modest gains in Tuesday trading, as the pair has pushed up to the mid-102 line in the European session. The dollar is showing some strength and has risen 100 points since the start of the week. In economic news, the Bank of Japan said it would continue with its expansionary monetary program. In the US, there are no major events on the schedule. Today’s highlight is the Empire State Manufacturing Index.

As widely expected, the BOJ said that its current monetary policy would continue. The Bank said it would continue to increase base money, its key monetary policy gauge, at an annual pace of 60-70 trillion yen. The BOJ added that it was pleased with the economy’s progress, saying that the economy continues to recover at a moderate pace. With a sales tax increase scheduled in April, the Bank is sending the markets a signal that it has no plans to implement additional stimulus in the near future.

Japanese Preliminary GDP, which is released on a quarterly basis, started off the week on a disappointing note. The indicator posted a modest gain of 0.3% in Q4, down from 0.5% in the previous reading. This was well short of the estimate of 0.7% and was the lowest reading we’ve seen since Q1 of 2013. Meanwhile, inflation indicators continue to point upwards, after years of deflation which hobbled the economy. Last week the Corporate Goods Price Index posted a healthy gain of 2.4%, matching the forecast.

Over in the US, it’s been a very quiet week, with no major releases scheduled until Wednesday. Last week, Unemployment Claims were above expectations, while retail sales numbers weakened in January. However, the market outlook with regard to the US economy remains positive, and the US dollar has posted strong gains against the yen so far this week.

USD/JPY for Tuesday, February 18, 2014

USD/JPY February 18 at 13:20 GMT

USD/JPY 102.48 H: 102.74 L: 101.79

USD/JPY Technical

• USD/JPY continues to move higher in Tuesday trading. The dollar showed strength early in the Asian session and barreled above the 102 line, touching a high of 102.74.
• On the upside, 102.53 is under strong pressure. If this line breaks, we could see the dollar push into 103 territory. The next resistance line is 103.30.
• 101.19 is providing support. Next is the key level of 100.00, which has remained intact since November.
• Current range: 101.19 to 102.53

Further levels in both directions:

• Below: 101.19, 100.00, 99.57 and 98.65
• Above: 102.53, 103.30, 104.17, 105.70, 106.85

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in Tuesday trading. This is consistent with what we are seeing from the pair, as the dollar continues to move upwards. Long positions continue to comprise a solid majority in the USD/JPY ratio, indicating trader bias towards the dollar continuing to move higher against the yen.

The dollar is on the move again on Tuesday trading. The pair is steady in the European session.

USD/JPY Fundamentals

• 3:28 BOJ Monetary Policy Statement.
• 7:21 BOJ Press Conference.
• 13:30 US Empire State Manufacturing Index. Estimate 9.9 points.
• 14:00 US TIC Long-Term Purchases. Estimate.28.9B.
• 15:00 US NAHB Housing Market Index. Estimate 56 points.

*Key releases are highlighted in bold

*All release times are GMT

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