USD/JPY has posted losses on Thursday, erasing the gains recorded in the Wednesday session. In North American trade, the pair is trading at 113.60. In economic news, Japan’s current account surplus dropped to JPY 1.73 trillion, shy of the estimate of JPY 1.75 trillion. In the US, PPI climbed to 0.5%, above the estimate of 0.2%. Unemployment claims ticked down to 236 thousand, below the forecast of 245 of thousand. On Friday, we could see further movement from USD/JPY, as the US releases retail sales, CPI and consumer confidence.
It’s been a rough ride for the Japanese yen, which has managed just one winning daily session since April 25. The yen has reversed this trend on Thursday following the firing of FBI director James Comey. The ensuing crisis has hurt the US dollar as investors have flocked to the safe-haven Japanese yen. On Wednesday, the BoJ released its summary of opinions from its April policy meeting. BoJ board members recommended that the central bank maintain its ultra-loose accommodative policy due to global downside risks. At the same time, policymakers noted that the economy has improved, boosted by stronger exports and production. The summary stated that the BoJ should upgrade its economic assessment to state that the economy “has been turning towards a moderate expansion”. On the inflation front, policymakers predicted that inflationary pressures would increase, but that the inflation target of 2 percent would not be attained before 2018. The summary reiterates the cautious optimism that characterized the BoJ rate statement in April – global demand has boosted the economy, but the BOJ feels that it’s too early too make any changes to the current quantitative easing program.
Washington is gripped in a major political crisis, following Trump’s firing of FBI director James Comey on Tuesday. Comey, who has been conducting an investigation into possible collusion between Trump and Russia during the presidential campaign, clearly has been a thorn in Trump’s side. The White House has claimed that it fired Comey over his handling of an email scandal involving Hillary Clinton, but the move has been roundly condemned by the Democrats, and some key Republicans have also voiced opposition as well. The firestorm could heat up further, with calls in Congress to appoint an independent investigator into Trump’s connections with Russia. Has Trump gone one step to far? This latest controversy shows no signs of fading away anytime soon, and could delay Trump agenda of tax reform and increased fiscal spending.
USD/JPY Fundamentals
Wednesday (May 10)
- 19:50 Japanese Bank Lending. Estimate 3.2%. Actual 3.0%
- 19:50 Japanese Current Account. Estimate 1.75T. Actual 173T
- 23:45 Japanese 30-y Bond Auction. Actual 0.82%
Thursday (May 11)
- 1:00 Japanese Economy Watchers Sentiment. Estimate 47.9. Actual 48.1
- 6:25 FOMC Member William Dudley Speaks
- 8:30 US PPI. Estimate 0.2%. Actual 0.5%
- 8:30 US Unemployment Claims. Estimate 245K. Actual 236K
- 8:30 US Core PPI. Estimate 0.2%. Actual 0.4%
- 10:30 US Natural Gas Storage. Estimate 52B
- 13:01 US 30-y Bond Auction
- 19:50 Japanese M2 Money Stock. Estimate 4.3%
Friday (May 12)
- 8:30 US CPI. Estimate 0.3%
- 8:30 US Core CPI. Estimate 0.2%
- 8:30 US Core Retail Sales. Estimate 0.5%
- 8:30 US Retail Sales. Estimate 0.6%
- 10:00 US Preliminary UoM Consumer Sentiment. Estimate 97.0
*All release times are GMT
*Key events are in bold
USD/JPY for Thursday, May 11, 2017
USD/JPY May 11 at 10:40 EDT
Open: 114.33 High: 114.35 Low: 113.45 Close: 113.61
USD/JPY Technical
| S3 | S2 | S1 | R1 | R2 | R3 |
| 110.94 | 112.57 | 113.55 | 114.96 | 115.90 | 116.87 |
USD/JPY edged lower in the Asian and European sessions. The pair continues to lose ground in North American trade
- 113.55 is providing weak support
- 114.96 is the next resistance line
- Current range: 113.55 to 114.96
Further levels in both directions:
- Below: 113.55, 112.57, 110.94 and 109.77
- Above: 114.96, 115.90 and 116.87
OANDA’s Open Positions Ratio
USD/JPY ratio is showing gains in short positions. Currently, long and short positions are evenly split, indicative of a lack of trader bias as to which direction USD/JPY will take next.
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