USD/JPY – Japanese yen ticks higher at start of week

The Japanese yen has ticked lower in the Monday session. In North American trade, USD/JPY is trading at 110.57, up 0.09% on the day. On the release front, Japan’s current account surplus narrowed to JPY 1.85 billion, crushing the estimate of JPY 1.18 billion. On Tuesday, Japan releases machine tool reports and PPI, while the U.S publishes JOLT Jobs Openings.

U.S employment data was a mix on Friday, as job growth remained above the 200-thousand level, but wage growth faltered. Nonfarm payrolls dropped to 213 thousand, but this beat the estimate of 195 thousand. Average Hourly Earnings edged lower to 0.2%, shy of the estimate of 0.3%. There was a surprise as the unemployment rate climbed to 4.0%, above the forecast of 3.8%. The data demonstrates that the U.S labor market remains strong, and the economy continues to perform well. The markets remain bullish on U.S growth, despite uncertainty in Europe and elsewhere, as well as the growing threat of an all-out trade war between the U.S and China.

USD/JPY showed little response to the FOMC minutes, which were released on Thursday. The minutes were somewhat dovish in tone, as policymakers gave a thumbs-up to the strong U.S economy, but expressed concern about developments abroad. These include growing trade tensions with U.S trading partners, as well as political and economic developments in Europe. The minutes also reiterated the Fed’s support for a “gradual” raise in interest rates. The markets are circling the September policy meeting for the next rate hike, with the CME Group setting the odds of a quarter-point hike at 80%. Japan has been spared from tariffs by the Trump administration but is wary of the escalating trade war between the U.S and China, as the Japanese economy is heavily reliant on exports, and increasing protectionism could take a toll on the Japanese economy.

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USD/JPY Fundamentals

Sunday (July 8)

  • 19:50 Japanese Bank Lending. Estimate 2.0%. Actual 2.2%
  • 19:50 Japanese Current Account. Estimate 1.18T. Actual 1.85T
  • 20:30 BoJ Governor Kuroda Speaks

Monday (July 9)

  • 1:02 Japanese Economy Watchers Sentiment. Estimate 48.2. Actual 48.1
  • 15:00 US Consumer Credit. Estimate 12.2B
  • 19:50 Japanese M2 Money Stock. Estimate 3.2%

Tuesday (July 10)

  • 2:00 Japanese Preliminary Machine Tool Orders
  • 10:00 US JOLTS Job Openings. Estimate 6.88M
  • 19:50 Japanese Core Machinery Orders. Estimate -5.0%
  • 19:50 Japanese PPI. Estimate 2.8%

*All release times are DST

*Key events are in bold

USD/JPY for Monday, July 9, 2018

USD/JPY July 9 at 9:20 DST

Open: 110.47 High: 110.60 Low: 110.35 Close: 110.58

USD/JPY Technical

S3 S2 S1 R1 R2 R3
108.31 109.21 110.21 111.22 112.30 113.75

USD/JPY inched lower in the Asian session. The pair was flat in the European session and this trend has continued in North American trade

  • 110.21 is providing support
  • 111.22 is the next resistance line

Further levels in both directions:

  • Below: 110.21, 109.21, 108.13 and 107.01
  • Above: 111.22, 112.30 and 113.75
  • Current range: 110.21 to 111.22

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.