The Japanese yen has posted gains on Monday, as USD/JPY trades in the low-116 range. The struggling yen has lost close to 200 points last week, as USD/JPY continues to trade at multi-year highs. In economic news, Japanese Preliminary GDP posted a decline of 0.4%. On the release front, today’s highlight is the Empire State Manufacturing Index. The markets are expecting a strong reading for October, with an estimate of 12.1 points.
The struggling Japanese economy officially slipped into recession, as GDP has posted two straight declines. In Q3, GDP declined -0.4%, well below the estimate of 0.5%. Prime Minister Abe responded by delaying an increase in the sales tax to 10%. Abe then surprised the markets by announcing elections halfway through his term. The upcoming election could end up as a referendum on Abenomics, which has involved sharp monetary easing and heavy government spending.
US consumer indicators looked strong on Friday. Retail Sales and Core Retail Sales both posted gains of 0.3%, edging above the estimate of 0.2%. UoM Consumer Sentiment continued its upward trend, climbing to 89.7 points in November. This was the indicator’s strongest performance since July 2007. Meanwhile, US Unemployment Claims has looked solid in recent readings, but the key indicator jumped to 290 thousand, missing the estimate of 282 thousand. This marked a seven-week high for the key indicator. The news wasn’t any better from JOLTS Jobs Openings, which weakened to 4.74M, down from 4.84M a month earlier. The estimate stood at 4.81M.
USD/JPY for Monday, November 17, 2014
USD/JPY November 17 at 13:25 GMT
USD/JPY 116.25 H: 116.88 L: 115.46
- USD/JPY posted sharp losses in the Asian session before changing directions and moving higher. The pair has edged higher in the European session.
- On the upside, 116.66 is an immediate resistance line. 117.94 is stronger.
- 115.75 is providing weak support. 114.65 is stronger.
- Current range: 115.75 to 116.66
Further levels in both directions:
- Below: 115.75, 114.65, 113.68, 112.94 and 110.68
- Above: 116.66, 117.94, 118.89 and 119.83
OANDA’s Open Positions Ratio
USD/JPY is pointing to gains in long positions on Monday. This is not consistent with the movement of USD/JPY, as the yen has posted small gains. The ratio is showing a majority of long positions, indicative of USD/JPY changing directions and moving to higher ground.
- 23:50 Japanese Current Account. Estimate 0.03T. Actual 0.41T.
- 23:50 Japanese Bank Lending. Estimate 2.4%.
- 13:30 US Empire State Manufacturing Index. Estimate 12.1 points.
- 14:15 US Capacity Utilization Rate. Estimate 79.3%.
- 14:15 US Industrial Production. Estimate 0.2%.
*Key releases are highlighted in bold
*All release times are GMT