USD/JPY – Japanese yen ticks higher, retail sales ahead

USD/JPY continues to have a quiet week. In Tuesday’s North American session, the pair is trading at 109.50, up 0.14% on the day. There are only two releases on the schedule. In the U.S., CB Consumer Confidence is expected to drop to 125.0 points. Japanese retail sales slowed to 1.4% in November and the downward trend is expected to continue in December, with an estimate of 0.9%. On Wednesday, the Federal Reserve will publish its monthly rate statement. Japan releases the BoJ summary of opinions from the January policy meeting as well as preliminary industrial production.

After four rate hikes last year, the Fed is widely expected to ease on policy in 2019. But by how much? The answer varies, depending on who you ask. The markets are not expecting any increases, while the Federal Reserve continues to stick with a forecast of two hikes. The Congressional Budget Office (CBO) has also weighed in, saying that it expects further rate increases this year. The CBO made the forecast in its 10-year outlook update, but did not specify how many hikes. The CBO report projected growth of 2.3% for the U.S economy in 2019, matching the forecast of the Federal Reserve.

On Monday, the BoJ released the minutes from the BoJ meeting in December, with a message of “more of the same”. Policymakers stated that the bank would maintain its ultra-accommodative policy “for an extended period of time”. The BoJ also expressed 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. On Wednesday, the BoJ will provide more details of the December meeting, with a summary of the views of individual board members. 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.

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USD/JPY Fundamentals

Tuesday (January 29)

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

Wednesday (January 30)

  • 00:00 Japanese Consumer Confidence. Estimate 42.5
  • 8:15 US ADP Nonfarm Employment Change. Estimate 170K
  • 14:00 US FOMC Statement
  • 14:00 US Federal Funds Rate. Estimate <2.50%
  • 14:30 US FOMC Press Conference
  • 18:50 BoJ Summary of Opinions
  • 18:50 Japanese Preliminary Industrial Production. Estimate -0.5%

*All release times are EST

*Key events are in bold

USD/JPY for Tuesday, January 29, 2019

USD/JPY January 29 at 8:50 EST

Open: 109.35 High: 109.50 Low: 109.13 Close: 109.50

USD/JPY Technical

S3 S2 S1 R1 R2 R3
107.36 108.11 109.37 110.28 110.90 112.16

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 gains by USD/JPY on Tuesday. 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: 109.37, 108.11, 107.36 and 106.62
  • Above: 110.28, 110.90 and 112.16

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.