USD/JPY – Yen Slips, Japanese Consumer Data Next

The Japanese yen has lost ground at the start of the week. In Monday’s North American session, USD/JPY is trading at 109.14, up 0.49% on the day. On the release front, US Personal Spending slowed to 0.4%, shy of the estimate of 0.6%. Later in the day, Japan releases Household Spending and Retail Sales, which are expected to show gains of 1.6% and 2.1%, respectively. On Tuesday, the US releases CB Consumer Confidence and President Trump will deliver the State of the Union address.

The yen has looked sharp in recent weeks, having gained 3.2% in January. Last week, the dollar dropped below the 109 level for the first time since September 2017. The greenback is under sustained pressure from its major rivals. On Wednesday, US Treasury Secretary Steven Mnuchin put more pressure on the dollar when he stated that the US had no problem with a weak dollar. Mnuchin has since backtracked, saying that his words were taken out of context and that the US has a long-term interest in a strong dollar. President Trump added that Mnuchin was misinterpreted, but USD/JPY still lost ground on Friday.

The markets have become accustomed to GDP releases above 3.0% in the US, so Advance GDP for Q4 was disappointing. The reading of 2.6% fell short of the estimate of 3.0%. The economy grew 2.3% in 2017, compared to 1.6% in 2016. Growth in Q4 was affected by stronger consumer spending, which led to a surge in imports. At the same time, the increase in consumer spending also boosted inflation, as the personal consumption expenditures index, which the Fed prefers to use, rose 1.9% in the fourth quarter, up from 1.3% in Q3. Meanwhile, the US manufacturing sector is booming, as durable goods orders in December hit 2.9%, crushing the estimate of 0.6%. This was the highest gain in six months, and helped make 2017 a banner year. Durable good orders increased 5.8% in 2017, the sharpest expansion since 2011.

USD/JPY Fundamentals

Monday (January 29)

  • 8:30 US Core PCE Price Index. Estimate 0.2%. Actual 0.2%
  • 8:30 US Personal Spending. Estimate 0.5%. Actual 0.4%
  • 8:30 US Personal Income. Estimate 0.3%. Actual 0.4%
  • 18:30 Japanese Household Spending. Estimate 1.6%
  • 18:30 Japanese Unemployment Rate. Estimate 2.7%
  • 18:30 Japanese Retail Sales. Estimate 2.1%

Tuesday (January 30)

  • 10:00 US CB Consumer Confidence. Estimate 123.2
  • 21:00 President Trump Speaks

*All release times are GMT

*Key events are in bold

USD/JPY for Monday, January 29, 2018

USD/JPY January 29 at 11:25 EDT

Open: 108.61 High: 109.18 Low: 108.51 Close: 109.14

USD/JPY Technical

S3 S2 S1 R1 R2 R3
106.14 107.29 108.21 109.11 110.10 111.53

USD/JPY edged higher in the Asian session and showed little movement in the European session. The pair is steady in the North American session

  • 108.21 is providing support
  • 109.11 is a weak resistance line

Current range: 108.21 to 109.11

Further levels in both directions:

  • Below: 108.21, 107.29 and 106.14
  • Above: 109.11, 110.10, 111.53 and 112.57

OANDA’s Open Positions Ratios

USD/JPY ratio has shown movement towards long positions. Currently, long positions have a majority (69%), indicative of trader bias towards USD/JPY continuing to move to higher ground.

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.