USD/JPY – Japanese yen slips despite strong retail sales, BOJ decision next

The Japanese yen has posted considerable losses in the Monday session, erasing Friday’s gains. In North American trade, USD/JPY is trading at 112.40, up 0.45% on the day. On the release front, Japanese retail sales posted a strong gain of 2.1%, matching the forecast. In the U.S, the Core PCE Price Index gained 0.2%, edging above the estimate of 0.1%. Personal spending edged up to 0.4%, matching the forecast. However, personal income dipped to 0.2%, its lowest level since August 2017. On Tuesday, the U.S releases CB consumer confidence. In Japan, the BoJ winds up its policy meeting and will release a policy statement.

Japanese retail sales posted gains for a 11th straight month, on an annualized basis. The Japanese Ministry of Economy, Trade and Industry (METI) noted that high costs for food and energy boosted retail sales. METI upgraded its assessment, saying that retail sales were improving “gradually”. Despite stronger consumer spending, the yen started the week with losses. The markets are keeping a close eye on the Bank of Japan, with policymakers expected to maintain the current monetary policy at the upcoming policy meeting.

Last week ended on a high note, as Advance GDP posted an impressive gain of 3.5%, above the estimate of 3.3%. This was down from the sizzling Final GDP for Q2, which came in at 4.2%. Still, analysts were not expecting a repeat of the Q2 performance, and the U.S dollar moved higher on Friday. With global stock markets spiraling lower, risk appetite has dampened as investors flock to the U.S dollar at the expense of other currencies. A rash of geopolitical hotspots has weighed on investor sentiment, including the spike in Italian debt, the Brexit impasse and the U.S-China trade war.

Euro pressured as Merkel’s CDU loses ground

U.S Dollar Stands Tall

Europe higher as tariffs hit Chinese stocks

USD/JPY Fundamentals

Sunday (October 28)

  • 19:50 Japanese Retail Sales. Estimate 2.1%. Actual 2.1%

Monday (October 29)

  • 8:30 US Core PCE Price Index. Estimate 0.1%. Actual 0.2%
  • 8:30 US Personal Spending. Estimate 0.4%. Actual 0.2%
  • 8:30 US Personal Income. Estimate 0.4%. Actual 0.4%
  • Tentative – US Loan Officer Survey
  • 19:30 Japanese Unemployment Rate. Estimate 2.4%

Tuesday (October 30)

  • 10:00 US CB Consumer Confidence. Estimate 136.3
  • Tentative – BoJ Monetary Policy Statement
  • Tentative – BoJ Policy Rate. Estimate -0.10%
  • Tentative  BoJ Outlook Report

Wednesday (October 31)

  • Tentative -BoJ Press Conference

*All release times are DST

*Key events are in bold

USD/JPY for Monday, October 29, 2018

USD/JPY October 29 at 10:45 DST

Open: 111.89 High: 112.56 Low: 111.78 Close: 112.40

USD/JPY Technical

S3 S2 S1 R1 R2 R3
110.28 111.20 112.30 113.75 114.73 115.50

USD/JPY ticked higher in the Asian session. The pair posted gains in European trade and continues to move higher in the North American session

  • 112.30 was tested earlier in resistance and is a weak line
  • 113.75 is the next line of resistance
  • Current range: 112.30 to 113.75

Further levels in both directions:

  • Below: 112.30, 111.20, 110.28 and 109.32
  • Above: 113.75, 114.73 and 115.50

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

Market Analyst at OANDA
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, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

Latest posts by Kenny Fisher (see all)