USD/JPY – Yen Steady to Start Off Week

The Japanese yen has posted gains on Friday, as the pair trades at the 102 line. On the release front, the BOJ released its policy statement. In the US, there are two key releases on the calendar – PPI and UoM Consumer Sentiment.

There were no surprises from the BOJ, which released a policy statement on Friday. The central bank said expansion of the monetary base would continue at its current level of JPY 60-70 trillion per year. This follows remarks from BOJ Governor Haruhiko Kuroda last week, who noted that the easing measures have led to the economy moving in the right direction. However, the monetary moves have hurt the yen, which continues to trade at very high levels against the dollar, and this trend is likely to continue.

Thursday’s key US events were a major disappointment, as retail sales and employment numbers were weak. Retail Sales came in at 0.3%, short of the estimate of 0.5%. Core Retail Sales could only muster a gain of 0.1%, shy of the forecast of 0.4%. Unemployment Claims, one of the most important economic indicators, rose to 317 thousand, missing market expectations of 306 thousand.

Japanese manufacturing numbers have been brutal in the month of May. There was more bad news on Thursday, as Core Machinery Orders fell by 9.1%, after a very strong gain a month earlier. However, this was slightly better than the estimate of -11.5%. The Manufacturing Index and Tertiary Industry Activity also slumped, pointing to serious trouble in the Japanese manufacturing sector. There was much better news to start off the week, as Final GDP soared 1.6% in Q1, a huge improvement from the weak gain of 0.2% in Q4. Current Account also looked sharp, posting a surplus for the first time since September. These strong numbers have reinforced the BOJ’s contention that the improving economy will be able to weather the sales tax hike which took effect in April.

USD/JPY for Friday, June 13, 2014

USD/JPY June 13 at 11:05 GMT

USD/JPY 102.04 H: 102.09 L: 101.72

USD/JPY Technical

• USD/JPY has posted gains in Friday trade.
• On the upside, 102.53 is the next resistance line. This followed by resistance at 103.07, which has held firm since early April.
• 101.19 continues to provide strong support.
• Current range: 101.19 to 102.53

Further levels in both directions:

• Below: 101.19, 100.00, 99.57 and 98.97
• Above: 102.53, 103.07, 104.17 and 105.70

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in long positions on Friday. This is consistent with the movement of the pair, as the US dollar has posted slight gains. The ratio continues to be made up of a majority of long positions, indicating trader bias towards the dollar continuing to move upwards.

USD/JPY is trading at the 102 line. The pair has edged upwards in the European session.

USD/JPY Fundamentals

• 2:41 BOJ Monetary Policy Statement.
• 4:30 Japanese Revised Industrial Production. Estimate -2.5%. Actual -2.8%.
• 6:32 Japanese BOJ Press Conference.
• 12:30 US PPI. Estimate 0.1%.
• 12:30 US Core PPI. Estimate 0.2%.
• 13:55 US Preliminary UoM Consumer Sentiment. Estimate 83.2 points.
• 13:55 US Preliminary UoM Inflation Expectations.

*All release times are GMT

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.