The Japanese yen is subdued in the Wednesday session. In the North American session, USD/JPY is trading at the 111 level. On the release front, Japanese Retail Sales posted a small gain of 0.1%, well short of the estimate of 0.7%. In the US, Pending Home Sales sparkled with a gain of 5.5%, well above the forecast of 2.3%. On Thursday, the US releases Final GDP and unemployment claims. Japan will publish Household Spending.
President Donald Trump found himself on the short end of the stick in the rough-and tumble politics in Washington. Last week, Trump’s bill to replace the Affordable Care Act was pulled before prior to a vote. This was a humiliating setback for Trump, given that the Republicans enjoying a majority in Congress. The bruising defeat has sent the US dollar sharply lower and market jitters higher. Trump’s administration has stumbled out of the starting gate, and after more than two months in office, he has yet to provide any details over even an outline of economic policy. The inquiry into the Trump administration’s links with Russia is gathering steam, and is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but he has his work cut out, trying to convince a skeptical Congress and general public that he can deliver the goods and push his tax legislation through Congress.
What’s next for the Bank of Japan? On Monday, the BoJ released a summary of the minutes of its policy meeting from March 16. There were no surprises, as policymakers said the BoJ’s ultra-easy monetary stance would continue as long as inflation remains well below the target of 2 percent. Japan’s economy has improved in recent months, boosted by a stronger manufacturing sector and an increase in exports, but domestic demand remains soft, resulting in weak inflation levels. We’ll get a look at household spending and Tokyo Core CPI on Thursday.
Tuesday (March 29)
- 19:50 Japanese Retail Sales. Estimate 0.7%. Actual 0.1%
Wednesday (March 30)
- 9:20 US FOMC Member Charles Evans Speech
- 10:00 US Pending Home Sales. Estimate 2.3%. Actual 5.5%
- 10:30 US Crude Oil Inventories. Estimate 1.2M. Actual 0.9M
Upcoming Key Events
Thursday (March 30)
- 8:30 US Final GDP. Estimate 2.0%
- 8:30 US Unemployment Claims. Estimate 244K
- 19:30 Japanese Household Spending. Estimate -1.6%
*All release times are GMT
*Key events are in bold
USD/JPY for Wednesday, March 29, 2017
USD/JPY March 28 at 13:20 EST
Open: 111.22 High: 111.32 Low: 110.71 Close: 111.02
USD/JPY showed limited movement in the Asian session. The pair edged lower in European trade but has moved upwards in the North American session
- 110.94 remains fluid. Currently it is a weak support line
- 112.57 is the next resistance line
- Current range: 110.94 to 112.57
Further levels in both directions:
- Below: 110.94, 109.77, 108.54 and 107.49
- Above: 112.57, 113.80 and 114.83
OANDA’s Open Positions Ratio
USD/JPY ratio continues to show gains towards long positions. Currently, long positions have a majority (63%), indicative of trader bias towards USD/JPY reversing directions and moving higher.