USD/JPY: Yen Firm Ahead of Key Japanese Data

USD/JPY has edged lower on Thursday, as the pair trades at the high-101 range late in the European session. On the release front, we’ll get a look at a host of Japanese data, highlighted by inflation and consumer spending indicators. In the US, today’s major event is Unemployment Claims. The markets are expecting little change from the employment indicator.

US Final GDP took an unexpected tumble in Q1. The markets were braced for a decline of 1.8%, but the indicator shocked with a much sharper drop of 2.9%, its worst reading since Q1 of 2009. There was more bad news to follow, as Core Durable Goods Orders declined by 0.1%, its first decline in five months. The estimate stood at 0.3%. Durable Goods Orders looked even worse, coming in at -1.0%, shy of the estimate of -0.1%. Despite the awful GDP, the currency markets remain calm and the dollar has held its own against the yen.

Earlier in the week, BOJ Governor Kuroda sounded upbeat about the Bank’s quantitative and qualitative easing policy, introduced in April 2013. Kuroda noted that growth had improved and deflation curbed, but that inflation was around 1%, well short of the target of 2%. The BOJ had hoped to reach its inflation target by 2015, but Kuroda acknowledged that this goal would take longer, and pledged that the BOJ would continue its current stance of large-scale monetary easing until the inflation target was reached. There was good news from the inflation front, as CSPI jumped 3.6%, beating the estimate of 3.2%. The markets are expecting more positive news from the inflation front, with the release of Tokyo Core CPI and National Core CPI later on Thursday.

USD/JPY for Thursday, June 26, 2014

USD/JPY June 26 at 11:50 GMT

USD/JPY 101.64 H: 101.95 L: 101.73

USD/JPY Technical

• USD/JPY edged lower in the Asian session and is almost unchanged in European trading.
• 102.53 is the next resistance line. This is followed by resistance at 103.07, which has held firm since early April.
• 101.19 is providing  support. This is followed by the key level of 100.
• 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 unchanged on Thursday, continuing the trend we have seen throughout the week. This is consistent with the movement of the pair, as the pair is showing little movement. The ratio is made up of a majority of long positions, indicating trader bias towards the dollar moving to higher ground.

USD/JPY Fundamentals

• 12:30 US Unemployment Claims. Estimate 314K.
• 12:30 US Core PCE Price Index. Estimate 0.2%.
• 12:30 US Personal Spending. Estimate 0.4%.
• 12:30 US Personal Income. Estimate 0.5%.
• 14:30 US Natural Gas Storage. Estimate 101B.
• 14:30 US Crude Oil Inventories. Estimate -1.2M.

*Key releases are highlighted in bold

*All release times are GMT

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