USD/JPY has posted losses in the Wednesday session, erasing the gains seen on Tuesday. In North American trade, USD/JPY is trading at 113.64, down 0.31% on the day. On the release front, there are no key US events on the schedule. Japan releases Core Machinery Orders and Current Account, and the Bank of Japan will publish its Summary of Opinions.
The BoJ will release its Summary of Opinions later on Wednesday, and the markets are not expecting any dramatic announcements. The Bank has repeated that it does not plan to change its inflation target of around 2 percent, even though inflation is running well below the target. The summary will provide details of the BoJ’s forecasts for inflation and economic growth, and a positive projection could boost the Japanese yen. Earlier in the week, the minutes of the October policy meeting indicated that many board members were satisfied that the inflation target would be met under current policy. BoJ Governor Kuroda echoed this message and called the economic expansion “highly sustainable”, and the markets took his optimism as a sign that the BoJ has no plans to inject further stimulus in the near future.
While US President Trump continues his visit to Asian Pacific countries, there is plenty of activity in Congress. After failing to pass a new healthcare act, President Trump has his sights set on tax reform, a key item in his domestic platform. Trump wants Congress to pass legislation overhauling the tax code before the end of the year, but that could prove to be too tight of a deadline. Most Democrats have come out against the proposal, and not all Republicans are on board. The bill would cut corporate taxes from 35% to 20%, but predictably, Democrat and Republican lawmakers are at odds as to whether the bill will lower taxes for the middle class. The bill is presently being debated in a congressional committee and is expected to move to the House floor next week. The Senate will present its version of the bill on Thursday, so we can expect plenty of activity in Congress in the next few weeks. Expectations that Trump will cut taxes has been the catalyst for a stock market rally over the past year, and if the bill does become law, the US dollar will likely gain ground.
Wednesday (November 8)
- 12:00 Japanese Leading Indicators. Estimate 106.7%. Actual 106.6%
- 10:30 US Crude Oil Inventories. Estimate -2.5M
- 13:01 US 10-year Bond Auction
- 18:50 BoJ Summary of Opinions
- 18:50 BoJ Bank Lending. Estimate 3.0%
- 18:50 Japanese Core Machinery Orders. Estimate -1.8%
- 18:50 Japanese Current Account. Estimate 2.05T
- 22:45 Japanese 30-year Bond Auction
Thursday (November 9)
- 8:30 US Unemployment Claims. Estimate 232K
*All release times are GMT
*Key events are in bold
USD/JPY for Wednesday, November 8, 2017
USD/JPY November 8 at 10:55 EDT
Open: 114.00 High: 114.01 Low: 113.40 Close: 113.64
USD/JPY was flat in the Asian session and posted losses in European trade. The pair is showing little movement in the North American session
- 113.55 was tested earlier in support and remains a weak line
- 114.49 is the next resistance line
Current range: 113.55 to 114.49
Further levels in both directions:
- Below: 113.55, 112.57, 110.94 and 110.10
- Above: 114.49, 115.50 and 116.54
OANDA’s Open Positions Ratios
USD/JPY ratio is unchanged in the Wednesday session. Currently, short positions have a majority (56%), indicative of trader bias towards USD/JPY continuing to move downwards.