The Japanese yen has posted slight gains in the Thursday session. In North American trade, USD/JPY is trading at 109.16, down 0.17% on the day. On the release front, Japan’s current account surplus dropped sharply to JPY 1.48 trillion, well short of the estimate of JPY 1.66 trillion. This marked the lowest surplus since May. Japanese Economy Watchers Sentiment pointed to contraction, slowing to 49.9 points. This fell short of the estimate of 53.7 points. Later in the day, Japan releases Tertiary Industry Activity, with an estimate of 0.2%. In the US, unemployment claims dropped down to 221 thousand, well below the estimate of 232 thousand.
The Japanese yen has posted gains this week. The safe-haven yen took advantage of the massive sell-off on global stock markets, as investors lost their risk appetite and snapped up the Japanese currency. On Monday, the Dow Jones posted its biggest one-day loss, and US markets have pointed downwards for much of the week. The catalyst for the stock market slide is concern that inflation could rise in the US, which in turn would trigger additional rate hikes from the Fed. Most currencies are lower against the greenback this week, with the yen being an exception.
The US labor market remains strong, so much so that January’s nonfarm payrolls and wage growth reports triggered the strong slide on global stock markets. Unemployment claims sparkled on Thursday, dropping to 221 thousand. The 4-week moving average dropped to 224,500, its lowest level since 1973. Although unemployment remains at record-low levels, the lack of slack in the labor market has not led to strong wage growth, and inflation remains below the Fed target of 2 percent. One of the priorities for the new chair of the Federal Reserve, Jerome Powell, will be to examine what steps can be taken to raise inflation, which has not kept up with robust economic growth.
Wednesday (February 7)
- 18:50 Japanese Current Account. Estimate 1.66T. Actual 1.48T
Thursday (February 8)
- 00:00 Japanese Economy Watchers Sentiment. Estimate 53.7. Actual 49.9
- 8:30 US Unemployment Claims. Estimate 232K. Actual 221K
- 10:00 US Mortgage Delinquencies. Actual 5.17%
- 10:30 US Natural Gas Storage. Estimate -116B. Actual -119B
- 13:01 US 30-year Bond Auction
- 18:50 Japanese M2 Money Stock. Estimate 3.6%
- 23:30 Japanese Tertiary Industry Activity. Estimate 0.2%
*All release times are GMT
*Key events are in bold
USD/JPY for Thursday, February 8, 2018
USD/JPY February 8 at 11:10 EDT
Open: 109.34 High: 109.79 Low: 109.12 Close: 109.19
In the Asian session, USD/JPY edged lower but reversed directions and posted gains. After limited movement in European trade, the pair has posted losses in the North American session
- 109.11 remains a weak line. It could break in the North American session
- 110.10 is the next resistance line
Current range: 109.11 to 110.10
Further levels in both directions:
- Below: 109.11, 108.21 and 107.29
- Above: 110.10, 111.53, 112.57 and 113.39
OANDA’s Open Positions Ratios
USD/JPY ratio is showing movement towards long positions. Currently, long positions have a majority (68%), indicative of trader bias towards USD/JPY reversing directions and moving higher.