USD/JPY – Japanese Yen Edges Lower, CPI Report Next

USD/JPY has posted small gains in the Thursday session. In North American trade, USD/JPY is trading at 107.37, up 0.13% on the day. On the release front, US unemployment claims ticked lower to 232 thousand, close to the estimate of 230 thousand. As well, the Philly Fed Manufacturing Index improved to 23.2 thousand, easily beating the estimate of 20.8 points. Later in the day, Japan releases National Core CPI, which is expected to tick lower to 0.9%. On Friday, Japan releases Tertiary Industry Activity, which is forecast to gain 0.1% after two straight declines.

The safe-haven yen often benefits from geopolitical crises, and the escalating tariff between China and the US could be a boon for the Japanese yen, if investors become unnerved by the spat which could hurt the global economy. After a lull in the trade battle between the two economic giants, another shot was fired this week. This time it came from China, which announced a tariff of some 179% on US sorghum crops, which is a livestock feed. China imports about $1 billion of sorghum annually, and if the tariff 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 administration decides to retaliate, the specter of an ugly trade war between the US and China could spook investors and send global markets into a tailspin.

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.

Dollar Supported by Higher Yields

USD/JPY Fundamentals

 Thursday (April 19)

  • 8:00 US FOMC Member Lael Brainard Speaks
  • 8:30 US Philly Fed Manufacturing Index. Estimate 20.8. Actual 23.2
  • 8:30 US Unemployment Claims. Estimate 230K. Actual 232K
  • 9:30 US FOMC Member Randal Quarles Speaks
  • 10:00 US CB Leading Index. Estimate 0.3%. Actual 0.3%
  • 10:30 US Natural Gas Storage. Estimate -23B. Actual -36B
  • 18:45 US FOMC Member Loretta Mester Speaks
  • 19:30 Japanese National Core CPI. Estimate 0.9%

 Friday (April 20)

  • 00:30 Japanese Tertiary Industry Activity. 0.1%

*All release times are DST

*Key events are in bold

USD/JPY for Thursday, April 19, 2018

USD/JPY April 19 at 10:55 DST

Open: 107.23 High: 107.52 Low: 107.18 Close: 107.37

USD/JPY Technical

S3 S2 S1 R1 R2 R3
105.53 106.64 107.29 108.00 108.89 110.11

USD/JPY edged higher in the Asian session and gave up some of these gains in the European session. USD/JPY is showing little movement in North American trade

  • 107.29 is a fluid line. Currently, it is providing weak support
  • 108.00 is the next resistance line

Further levels in both directions:

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

OANDA’s Open Positions Ratios

USD/JPY ratio is almost unchanged in the Thursday session. Currently, long positions have a majority (68%), 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.