USD/JPY – Yen Dips Under 120 on Strong Manufacturing Data

The Japanese yen has posted slight gains on Thursday, as USD/JPY trades just below the 120 line. On the release front, Japanese Core Machinery Tools posted a strong gain of 8.3% late Wednesday. This was followed by Preliminary Machine Tool Orders, which climbed 20.4%.  In the US, we’ll get a look at retail sales reports and unemployment claims, so we could see some strong movement from USD/JPY during the North American session.

Japanese manufacturing data has rebounded after Tertiary Industry Activity disappointed earlier in the week. Japanese Core Machinery Tools jumped 8.3% in December, its strongest gain since March. This easily beat the estimate of 2.4%. Preliminary Machine Tool Orders, a minor event, gained 20.4%.

US employment numbers remain solid, as JOLTS Jobs Openings climbed to 5.05 million in December, matching expectations. This was the indicator’s highest level since 2001, and points to more available jobs due to an increase in demand for goods and services. The strong reading follows a solid US Nonfarm Payrolls report for January, which was released on Friday. The key employment indicator improved to 257 thousand in January, up from 252 thousand a month earlier. This easily beat the estimate of 236 thousand. Will unemployment claims follow suit with a strong reading on Thursday? Strong job numbers will increase the likelihood of a rate hike by the Federal Reserve in mid-2015, which is bullish for the US dollar.

USD/JPY for Thursday, February 12, 2015

USD/JPY February 12 at 13:00 GMT

USD/JPY 120.20 H: 120.37 L: 119.80

USD/JPY Technical

• USD/JPY showed little movement in the Asian session. The pair has moved lower in the European session, dropping close to support at 118.69 before moving upwards.
• 119.83 remains a weak support line. 118.69 is stronger.
• 120.63 is an immediate resistance line.
• Current range: 119.83 to 120.63

Further levels in both directions:

• Below: 119.83, 118.69, 117.49, 116.69 and 115.56
• Above: 120.63, 121.69, 122.19 and 123.66

OANDA’s Open Positions Ratio

USD/JPY ratio is showing gains in short positions on Thursday, reversing the direction seen a day earlier. This is consistent with the pair’s movement, as the yen has posted small gains. The ratio has a majority of long positions, indicative of trader bias towards the US dollar moving to higher ground.

USD/JPY Fundamentals

• 13:30 US Core Retail Sales. Estimate -0.4%.
• 13:30 US Retail Sales. Estimate -0.4%.
• 13:30 US Unemployment Claims. Estimate 282 thousand.
• 15:00 US Business Inventories. Estimate 0.2%.
• 15:30 US Natural Gas Storage. Estimate 165B.
• 18:01 US 30-year Bond Auction.

*Key releases are highlighted in bold

*All release times are GMT

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