USD/JPY – Japanese Yen Dips, All Eyes on Singapore Summit

The Japanese yen has posted slight losses in the Monday session. In the North American session, USD/JPY is trading at 109.90, up 0.32% on the day. On the release front, Japanese Core Machinery Orders impressed with a gain of 10.1%, crushing the estimate of 2.5%. Preliminary Machine Tool Orders was down sharply, with a gain of 14.9%. Later in the day, we’ll get a look at BSI Manufacturing Index and PPI. There are no major indicators in the U.S. On Tuesday, the US releases CPI reports. 

The markets were braced for a bumpy meeting between the Group of Seven leaders on Friday, but the sharp disagreements between President Trump and the other six members were far worse than expected. Trump openly clashed with the other leaders over his recent tariffs against the European Union and Canada and pulled back his endorsement of the traditional post-summit statement put out by the other members. The undiplomatic Trump also tweeted that Canadian Prime Minister Trudeau, who hosted the summit, was “dishonest and weak”. Canada and the EU are furious over recent US tariffs, especially because of Trump pushed them through on the basis of ‘national security’. The glaring cracks in G-7 unity could cast a long shadow on trade relations between the U.S and the “G-6”, with business confidence and capital spending at risk if the tariff spat continues. Trump has not slapped tariffs on Japan, but the export-based Japanese economy has plenty to lose if the tit-for-tat tariff battle escalates, which could snowball into a full-blown global trade war.

Japanese officials are keeping a close eye on the historic summit between US President Trump and North Korean President Kim Jong-un in Singapore in Tuesday. The meeting will mark the first ever face-to-face meeting between leaders of the U.S and North Korea. It remains unclear if the two leaders will sign any agreements, or will the sides treat the summit as a “getting to know you” opportunity. North Korean missiles represent a significant threat to Japan’s security, and Japan will want to see significant de-nuclearization steps by North Korea before the U.S removes any troops from South Korea.

  What You Need to Know About the US-North Korea Summit

  Upbeat Markets Ahead of Busy Week

USD/JPY Fundamentals

Sunday (June 10)

  • 19:50 Japanese Core Machinery Orders. Estimate 2.5%. Actual 10.1%

Monday (June 11)

  • 1:59 Japanese Preliminary Machine Tool Orders. Actual 14.9%
  • 13:01 US 10-year Bond Auction
  • 19:50 Japanese BSI Manufacturing Index. Estimate 3.2
  • 19:50 Japanese PPI. Estimate 2.1%

Tuesday (June 12)

  • 8:30 US CPI. Estimate 0.2%
  • 8:30 US Core CPI. Estimate 0.1%

*All release times are DST

*Key events are in bold

USD/JPY for Monday, June 11, 2018

USD/JPY June 11 at 11:25 DST

Open: 109.54 High: 110.07 Low: 109.32 Close: 109.92

USD/JPY Technical

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

USD/JPY edged upwards in the Asian session and inched higher in the European trade. The pair is flat in North American trade

  • 108.89 is providing support
  • 110.11 is a weak resistance line

Further levels in both directions:

  • Below: 108.89, 108.00, 107.29 and 106.09
  • 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 (59%). This is 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.