USD/JPY – Yen Ticks Higher, Japanese Inflation Report Next

USD/JPY has posted small gains in the Wednesday session. In North American trade, USD/JPY is trading at 107.15, up 0.13% on the day. On the release front, there are no key US events. The markets will be listening to speeches from FOMC members John Williams and Randal Quarles. On Thursday, the US releases unemployment claims and the Philly Fed Manufacturing Index. Japan will release National Core CPI.

The recent trade battle between the US and China has been overshadowed by events in Syria, but the threat of further tariffs between the world’s largest two economies could again roil the markets and in turn, send gold prices higher. Another salvo was fired on Tuesday, as China slapped a tariff of some 179% on US sorghum crops, which is a livestock feed. China imports about $1 billion of sorghum annually, and the tariff, if it remains in place, will essentially halt US exports of sorghum to China. The Chinese government has threatened to impose tariffs on US soybean exports, valued at some $12 billion each year. If the US opts to retaliate, the specter of an ugly trade war between the US and China could spook investors and boost the safe-haven Japanese currency.

With the huge fluctuations that Bitcoin has exhibited in recent months, there has been plenty of press about cryptocurrencies. The proliferation of cryptocurrencies has led to discussions about central bank-issued digital currencies (CBDC), and their effect on the global financial scene. At a banking conference earlier this week,  BoJ Deputy Governor Masayoshi Amamiya said that CBDC would have a negative impact on the current financial system, but added that cryptocurrencies could find a role with central banks, such as in payment and settlement transactions. Currently, the BoJ and ECB are involved in a joint initiative, Project Stella, which is examining the use of Blockchain in securities transactions.

USD/JPY Fundamentals

 Wednesday (April 18)

  • 10:30 US Crude Oil Inventories. Estimate -0.5M. Actual -1.1M
  • 14:00 US Beige Book 
  • 15:15 US FOMC Member William Dudley Speaks
  • 16:15 US FOMC Member Randal Quarles Speaks

 Thursday (April 19)

  • 8:30 US Philly Fed Manufacturing Index. Estimate 20.8
  • 8:30 US Unemployment Claims. Estimate 230K
  • 19:30 Japanese National Core CPI. Estimate 0.9%

*All release times are EST

*Key events are in bold

USD/JPY for Wednesday, April 18, 2018

USD/JPY April 18 at 10:45 EST

Open: 107.01 High: 107.39 Low: 107.00 Close: 107.13

USD/JPY Technical

S3 S2 S1 R1 R2 R3
104.32 105.53 106.64 107.29 108.00 108.89

USD/JPY posted gains in the Asian session but retracted slightly in European trade. USD/JPY has inched lower in North American trade

  • 106.64 is providing support
  • 107.29 was tested earlier in resistance. It is a weak line

Further levels in both directions:

  • Below: 106.64, 105.53 and 104.32
  • Above: 107.29, 108.00, 108.89 and 110.11
  • Current range: 106.64 to 107.29

OANDA’s Open Positions Ratios

USD/JPY ratio is showing slight movement towards long positions in the Wednesday session. Currently, long positions have a majority (67%), 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.