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USD/JPY – Yen Kicks Off Week With Losses

The Japanese yen has started the week with losses against the US dollar. Early in Monday’s North American session, the pair is trading in the mid-118 range. On Sunday, the Japanese trade deficit narrowed to JPY -0.71 trillion, within expectations. As well, the BOJ released the minutes of its monetary policy. Monday’s sole Japanese event is the Services Producer Price Index. There are no US releases on Monday.

The Japanese trade deficit narrowed sharply in December, but this failed to prevent the yen from losing ground on Monday. The deficit dropped to JPY 0.71 trillion, slightly below the estimate of 0.74 trillion, and its lowest reading since June 2013. Later in the day, Japan will release the Services Producer Price Index, an important gauge of inflation in the corporate sector. The markets are expecting a strong gain of 3.6%, unchanged from the previous reading.

As expected, last week the BOJ maintained its stimulus program and stated in its policy statement that it would increase base money at a pace of JPY 80 trillion each year. This gave a boost to the yen, as many market players were expecting additional stimulus from the BOJ, given the weak economy and lack of inflation. With oil prices continuing to drop, the BOJ may be forced to reconsider further stimulus in order to avoid a recurrence of deflation, which hobbled the Japanese economy for years.

USD/JPY for Monday, January 26, 2015

USD/JPY January 26 at 14:25 GMT

USD/JPY 118.45 H: 118.48 L: 117.37

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
115.56 116.69 117.49 118.69 119.83 120.63

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in long positions on Monday, continuing the direction which marked the ratio for most of last week. This is consistent with the pair’s movement, as the yen has posted strong losses. The ratio currently has a majority of long positions, indicative of trader bias towards the US dollar continuing to move to higher ground.

USD/JPY Fundamentals

*Key releases are highlighted in bold

*All release times are GMT

 

OANDA MarketPulse Nominated for FXstreet’s 2015 Forex Best Awards

We are pleased to share the news that FXstreet – Europe’s oldest forex trading portal, published online in more than 50 countries – has nominated your MarketPulse team for the “Best Sell-Side Analysis Team” award again this year (the winners in 2014!), as well as in the category of “Best Analysis”.

The annual Forex Best Awards highlight the best analysis, educational content, and contributors on its website from the preceding year. It is a tremendous honour to be considered for this industry accolade out of the thousands of top tier banks and financial blogs online.

However, in order to win these important awards, we need your help – we need you to vote for us [1].

[1]

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 [5]

Market Analyst at OANDA [6]
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

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