USD/JPY has sustained sharp losses on Wednesday. In the European session, the pair is trading in the mid-116 range. The yen has taken advantage of awful US retail numbers. Core Retail Sales fell by 1.0%, while Retail Sales dropped 0.9%. In Japan, today’s highlight is Core Machinery Orders, with the markets expecting a strong gain of 4.8.
US retail sales caught the markets off guard with sharp declines in December. Core Retail Sales came in at -1.0%, while Retail Sales followed suit with a loss of 0.9%. Both key indicators recorded their worst showings since May 2010. Part of the sharp drop can be attributed to lower receipts at gasoline stations, as gas prices have fallen sharply in recent weeks. USD/JPY responded sharply to the weak retail numbers, as the pair has fallen about 120 points so far on Wednesday.
The news was rosier on the employment front on Tuesday, as JOLTS Jobs Openings climbed to 4.97 million, easily beating the forecast of 4.86 million. This is the indicator’s highest level since January 2001. The strong employment numbers are a welcome result of the robust economy, as the deepening recovery fuels demand for more workers. The health of the labor market is an important component of any decision to raise interest rates, so upcoming employment releases will be under the market microscope as the Fed mulls when to raise interest rates.
USD/JPY for Wednesday, January 14, 2015
USD/JPY January 14 at 14:25 GMT
USD/JPY 116.60 H: 117.93 L: 116.08
- USD/JPY has posted losses in the Asian and European sessions, breaking below two support levels.
- 116.69 is a weak resistance line. 117.94 is stronger.
- 115.56 is a strong support level.
- Current range: 115.56 to 116.69
Further levels in both directions:
- Below: 115.56, 113.64, 112.41 and 110.11
- Above: 116.69, 117.94, 118.69, 119.83 and 120.63
OANDA’s Open Positions Ratio
USD/JPY ratio is almost unchanged on Wednesday. This is consistent with the pair’s movement, as the pair is showing little change on the day. The ratio has a majority of long positions, indicative of trader bias towards the dollar breaking out of range and moving upwards.
- 3:45 Japanese 30-year Bond Auction. Actual 1.12%.
- 6:00 Japanese Preliminary Machine Tool Orders. Actual 33.8%.
- 13:30 US Core Retail Sales. Estimate +0.1%. Actual -1.0%.
- 13:30 US Retail Sales. Estimate +0.2%. Actual -0.9%.
- 13:30 US Import Prices. Estimate -2.7%. Actual -2.5%.
- 15:00 US Business Inventories. Estimate 0.2%.
- 15:30 US Crude Oil Inventories. Estimate 1.2M.
- 18:01 US 30-year Bond Auction.
- 19:00 US Beige Book.
- 23:50 Japanese Core Machinery Orders. Estimate 4.8%.
- 23:50 Japanese PPI. Estimate 2.2%.
*Key releases are highlighted in bold
*All release times are GMT