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USD/JPY – Yen in Holding Pattern as US Votes for President

USD/JPY is showing little movement in the Tuesday session, as the pair trades at 104.70. In the US, today’s highlight is the US presidential election. The key event on the schedule is JOLTS Job Openings, with the indicator expected to improve to 5.67 million. Japan will release Current Account, with the surplus expected to remain at JPY 1.98 trillion.

After a bruising and bitter campaign, Election Day has finally arrived. US voters in their millions will flock to the polls and choose either Hillary Clinton or Donald Trump as their new president. Although polls continue to point to a tight race, Clinton appears to have the upper hand as she has an easier path to garnering the 270 electoral votes needed to claim victory. The most recent polls indicate that voters favor Clinton over Donald Trump by a margin of three to five percent. On the weekend, the Clinton campaign received a boost as the FBI announced that it had no reason to change its conclusion that Clinton should not face criminal charges in her use of private emails while she was secretary of state [1]. There are different market scenarios depending on the actual outcome of the election, with the worst case scenario being a too-close-to-call result [2]. If either candidate fails to deliver a decisive victory, the leadership vacuum and uncertainty surrounding the result could trigger higher volatility in the markets. However, if Clinton wins a clear victory, the US dollar could respond with broad gains. The election could also have a significant effect on monetary rate policy. Currently, the odds of a rate hike in December stands at 71.5 percent.However, if the election results trigger market volatility, the Federal Reserve could hold off from raising interest rates at its next policy meeting in December.

The BoJ released its minutes from the September policy meeting on Monday. Policymakers acknowledged that it “may take time to heighten inflation expectations”, a sentiment stated recently by BoJ Governor Haruhiko Kuroda. The governor lowered expectations about reaching its inflation target of 2.0 percent, saying that this goal is unlikely to be reached prior to 2018. The BOJ’s has adopted a massive stimulus program and cut interest rates into negative territory in order to kick-start the economy and raise inflation levels. However, the program has failed on both accounts, as the economy remains weak and continues to grapple with deflation.

USD/JPY Fundamentals

Tuesday (November 8)

*All release times are EDT

*Key events are in bold

USD/JPY for Tuesday, November 8, 2016

USD/JPY November 8 at 6:20 EDT

Open: 104.46 High: 104.69 Low: 103.29 Close: 104.69

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
102.36 103.02 104.32 105.44 106.72 107.49

Further levels in both directions:

OANDA’s Open Positions Ratio

USD/JPY ratio is unchanged in the Tuesday session. Currently, long positions command a majority (56%), indicative of trader bias towards USD/JPY continuing to move higher.

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 [6]

Market Analyst at OANDA [7]
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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