USD/JPY – Yen Posts Slight Gains Ahead of BOJ Statement

The Japanese yen has posted small gains on Tuesday, as USD/JPY trades in the high-118 range. On the release front, there are no Japanese releases on Tuesday, but we’ll get a look at the BOJ policy statement early on Wednesday. With inflation sagging and well short of the BOJ’s 2% target, the central bank is expected to continue its accommodative monetary stance. In the US, today’s highlight is the Empire State Manufacturing Index. The markets are expecting the indicator to soften in the February report.

Japanese manufacturing data started the week on a positive note, as Revised Industrial Production gained 0.8%, bouncing back from a decline in the previous release. This was within expectations, as the estimate was 1.0%. Last week, Japanese Core Machinery Tools jumped 8.3% in December, its strongest gain since March. This easily beat the estimate of 2.4%.

US releases wrapped up a disappointing week on a sour note, as the UoM Consumer Sentiment slipped for the first time in five months. The key indicator dropped to 93.6 points, down sharply from 98.2 in the previous report. On Thursday, retail sales and jobless numbers softened. Core Retail Sales declined by 0.9%, while Retail Sales dropped by 0.8%. Both indicators were well off their estimates of -0.4%. There was no relief from unemployment claims, which jumped to 304 thousand, compared to 284 thousand in the previous reading. The markets had expected a stronger reading of 282 thousand.

USD/JPY for Tuesday, February 17, 2015

USD/JPY February 17 at 11:30 GMT

USD/JPY 118.83 H: 118.93 L: 118.24

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
116.69 117.49 118.69 119.83 120.63 121.69

 

  • USD/JPY was flat in the Asian session. The pair has edged higher in European trade and broke above resistance at 118.69.
  • 118.69 is a weak support line. 117.49 is stronger.
  • 119.83 is a strong resistance line.
  • Current range: 118.69 to 119.83

Further levels in both directions:

  • Below: 118.69, 117.49, 116.69, 115.56 and 113.83
  • Above: 119.83, 120.63, 121.69 and 122.19

 

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in long positions on Tuesday. This is consistent with the pair’s movement, as the yen has posted slight 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 Empire State Manufacturing Index. Estimate 8.9 points.
  • 15:00 US NAHB Housing Market Index. Estimate 58 points.
  • 21:00 US TIC Long-Term Purchases. Estimate 41.3B.

*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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.