USD/JPY – Yen Improves as Pair Dips Below 120

USD/JPY has posted slight losses on Tuesday, as the pair trades below the 120 line. The yen has recovered much of last week’s losses, having gained close to 200 points since the start of the week. On the release front, Japanese Preliminary Machine Tool Orders improved to a 4-month high. Over in the US, today’s highlight is JOLTS Job Openings. The markets are expecting an improvement in the October release, with an estimate of 4.81M.

The Japanese economy is clearly in trouble, as Final GDP contracted in the third quarter by 0.4%. The second quarter reading was downgraded to -1.9%, compared to the original forecast of -1.6%. These numbers reiterate the Preliminary GDP data back in November, which showed a second straight quarter of decline, indicating recession. There was better news from Current Account, as the surplus continued to JPY 0.95 trillion, well above the estimate of JPY 0.46 trillion.

The US ended the week with a superb Nonfarm Payrolls report, as the indicator shot up to 321 thousand in November, stunning the markets which had expected a rise of 231 thousand. There was also a rise in wages, which should translate into stronger inflation numbers. The unemployment rate held steady at 5.8%, matching the forecast. The excellent Nonfarm Payrolls should help the Fed remain on course for a rate hike in the first half of 2015.

USD/JPY for Tuesday, December 9, 2014

USD/JPY December 9 at 13:55 GMT

USD/JPY 119.52 H: 121.00 L: 119.44

USD/JPY Technical

• USD/JPY is showing some volatility on Tuesday. The pair lost ground in the Asian session. USD/JPY rebounded in the European session but then retracted. The dollar remains under pressure in the North American session.
• 118.69 is providing strong support.
• 119.63 is under strong pressure. 120.63 is stronger.
• Current range: 118.69 to 119.63

Further levels in both directions:

• Below: 118.89, 117.94, 116.66 and 114.57
• Above: 119.63, 120.63, 121.39, 122.18 and 123.35

OANDA’s Open Positions Ratio

USD/JPY ratio is posting to gains in short positions on Tuesday. This is consistent with pair’s movement, as the yen has posted gains. The ratio is pointing to gains in long positions, indicative of trader bias towards USD/JPY gaining ground.

USD/JPY Fundamentals

• 3:45 Japanese 30-year Bond Auction. Actual 1.46%.
• 6:00 Japanese Preliminary Machine Tool Orders. Actual 36.6%.
• 12:30 US NFIB Small Business Index. Estimate 96.6 points. Actual 98.1 points.
• 15:00 US JOLTS Job Openings. Estimate 4.81M.
• 15:00 US IBD/TIPP Economic Optimism. Estimate 47.2 points.
• 15:00 US Wholesale Inventories. Estimate 0.1%.

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.