The Japanese yen is showing little movement in the Monday session. In North American trade, USD/JPY is trading at 109.27, up 0.10% on the day. On the release front, the Bank of Japan released its minutes from the April policy meeting. Later in the day, Japan releases Household Spending, which is expected to rebound with a strong gain of 1.2%. There are no major US releases on the schedule. On Tuesday, the US releases PPI and JOLTS Job Openings. We’ll also hear from Federal Reserve Chair Jerome Powell, who will speak at an event in Zurich.
The Bank of Japan minutes from the March meeting were upbeat. The minutes said that the economy, as well as inflation, are likely to continue on an upward trend. The bank has long sought to reach an inflation target of around 2 percent, and if policymakers are correct and this goal is on its way to being achieved, the BoJ will be able to contemplate a reduction in its stimulus program, a move which could have a substantial impact on the yen. However, the cautious BoJ is likely to stick to current policy well into 2019, even if economic conditions improve and inflation moves closer to target.
In the US, job numbers were a mixed bag on Friday. Nonfarm payrolls rebounded with a gain of 164 thousand, although this fell short of the estimate of 190 thousand. Wage growth dropped from 0.3% to 0.1%, missing the estimate of 0.2 percent. There was some good news from the unemployment rate, which dropped to 3.9%, beating the estimate of 4.1%. The Fed will likely be pleased that nonfarm payrolls were not red hot, as they April report justifies its policy of gradual rate hikes.
Sunday (May 6)
- 19:50 BoJ Monetary Policy Meeting Minutes
Monday (May 7)
- 8:25 US FOMC Member Raphael Bostic Speaks
- 14:00 US FOMC Member Thomas Barkin Speaks
- Tentative – US Loan Officer Survey
- 15:00 US Consumer Credit. Estimate 16.2B
- 19:30 Japanese Household Spending. Estimate 1.2%
- 23:45 Japanese 10-year Bond Auction
Tuesday (May 8)
- 3:15 Federal Reserve Chair Jerome Powell Speaks
- 8:30 US PPI. Estimate 0.2%
- 8:30 US Core PPI. Estimate 0.2%
- 10:00 US JOLTS Job Openings. Estimate 6.02M
*All release times are DST
*Key events are in bold
USD/JPY for Monday, May 7, 2018
USD/JPY May 7 at 10:45 DST
Open: 109.10 High: 109.40 Low: 108.75 Close: 109.21
USD/JPY has edged lower in the Asian and European sessions. The pair is steady in North American trade
- 108.89 was tested earlier in support
- 110.11 is the next resistance line
Further levels in both directions:
- Below: 108.89, 108.00, 107.29 and 106.64
- Above: 110.11, 111.22 and 112.06
- Current range: 108.89 to 110.11
OANDA’s Open Positions Ratios
In the Monday session, USD/JPY ratio is showing long positions with a majority (60%). This is indicative of trader bias towards USD/JPY reversing directions and heading lower.