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USD/JPY – Japanese Yen Trading Sideway, Shrugs Off Upbeat Minutes

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.

All eyes will be on this week’s US CPI report [1]

U.S Dollar Bulls Take Firm Control [2]

USD/JPY Fundamentals

Sunday (May 6)

Monday (May 7)

Tuesday (May 8)

*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 Technical

S3 S2 S1 R1 R2 R3
107.29 108.00 108.89 110.11 111.22 112.06

USD/JPY has edged lower in the Asian and European sessions. The pair is steady in North American trade

Further levels in both directions:

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.

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 [6]

Market Analyst at OANDA [7]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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