USD/JPY – Japanese yen edges higher as Japanese inflation within expectations

USD/JPY has started the week with slight gains. In Monday’s North American session, the pair is trading at 109.28, down 0.25% on the day. On the release front, the Bank of Japan released the minutes of the December policy meeting. Japanese SPPI edged lower to 1.1%, shy of the estimate of 1.2%. There are no U.S. events on the schedule. On Tuesday, the U.S. releases CB Consumer Confidence and Japan publishes retail sales.

On Thursday, there was a surprise breakthrough in the U.S. shutdown, the longest ever. President Trump agreed to reopen government services for a 3-week period, even though he did not receive any funds for his border wall with Mexico. Risk sentiment has jumped, as investors are optimistic that the temporary deal will lead to an agreement which resolves the shutdown. The U.S. dollar was broadly lower on Friday, but the safe-haven yen was unable to make any inroads against the greenback.

The BoJ has no plans to change course on monetary policy, and this was underscored in the minutes from the BoJ policy meeting in December. Policymakers stated that the bank would maintain its ultra-accommodative policy “for an extended period of time”. There was concern about the Chinese slowdown and the negative impact it could have on the Japanese economy. Other members expressed concern over weak inflation, which remains well below the bank’s inflation target of around 2 percent. The U.S.-China trade war has weighed on Japan’s economy, and if the crisis continues, the economy could tip into recession. The key export sector is hurting, as exports fell in December to their lowest level in two years.

Brexit, trade war, Fed and US jobs this week

Euro firmer on US dollar slippage, ratings

Be prepared, it’s an action-packed week in capital markets

USD/JPY Fundamentals

Sunday (January 27)

  • 18:50 Japanese Monetary Policy Meeting Minutes
  • 18:50 Japanese SPPI. Estimate 1.2%. Actual 1.1%

Monday (January 28)

  • There are no releases in the U.S. or Japan

Tuesday (January 29)

  • 10:00 US CB Consumer Confidence. Estimate 125.0
  • 18:50 Japanese Retail Sales. Estimate 0.9%

*All release times are EST

*Key events are in bold

USD/JPY for Monday, January 28, 2019

USD/JPY January 28 at 10:15 EST

Open: 109.55 High: 109.58 Low: 109.21 Close: 109.27

USD/JPY Technical

S3 S2 S1 R1 R2 R3
106.62 107.36 108.11 109.37 110.28 110.95

USD/JPY posted small losses in the Asian session and partially recovered in the European session. The pair has resumed its downward movement in the North American session

  • 109.37 has switched to a support level after losses by USD/JPY on Monday. It is a weak line
  • 110.28 is the next resistance line
  • Current range: 109.37 to 110.28

Further levels in both directions:

  • Below: 108.11, 107.36 and 106.62
  • Above: 108.11, 109.37, 110.28 and 110.95

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.