- MarketPulse - https://www.marketpulse.com -

USD/JPY – Yen Shrugs off GDP Contraction

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 Technical

S3 S2 S1 R1 R2 R3
113.68 114.65 115.75 116.66 117.94 118.89

 

Further levels in both directions:

 

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.

 

USD/JPY Fundamentals

*Key releases are highlighted in bold

*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.

Kenny Fisher

Kenny Fisher [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

Latest posts by Kenny Fisher (see all [4])