USD/JPY – Yen subdued ahead of Japanese consumer spending

USD/JPY is showing little movement on Thursday. In the North American session, the pair is trading at 111.58, up 0.08% on the day. On the release front, U.S. unemployment claims impressed, dropping to 202 thousand. This was below the forecast of 215 thousand. Later in the day, Japan releases household spending, which is expected to tick lower to 1.9%. On Friday, the focus will be on U.S. employment data, with the release of nonfarm payrolls and wage growth.

It’s been a disappointing week for U.S. numbers, and the trend continued on Wednesday. ADP nonfarm payrolls plunged to 129 thousand, down from 183 thousand in the previous release. Is this a precursor of what to expect on Friday? Nonfarm payrolls are projected at 175 thousand, a soft number in comparison to recent releases. ISM Non-Manufacturing PMI also stumbled on Wednesday, falling from 59.7 to 56.1 points.

Japanese manufacturing has been struggling, and this was underlined in the Tankan manufacturing index for Q4, which dropped to 12, down from 19 in the third quarter. This marked the weakest score since 2013. The steep drop in manufacturing was expected, as less global demand for Japanese exports has taken a bite out of manufacturing activity. However, things could improve if the U.S. and China can reach a deal, after a bruising trade war which has rocked the global economy. The sides have made substantial progress, with reports that an agreement between the world’s two largest economies is 90% complete. The outstanding issues include enforcement mechanisms and the removal of trade tariffs. There has been positive news out of China this week, as manufacturing PMI posted a 14-month high, and the China 50 index has climbed to its highest level since March 2018.

US and China seek asymmetric enforcers

Trade deal hopes euphoria continues

USD/JPY Fundamentals

Thursday (April 4)

  • 7:30 US Challenger Job Cuts. Actual 0.4%
  • 8:30 US Unemployment Claims. Estimate 215K. Actual 202K
  • 10:30 US Natural Gas Storage. Estimate 2B
  • 19:30 Japanese Average Cash Earnings. Estimate 0.9%
  • 19:30 Japanese Household Spending. Estimate 1.9%

Friday (April 5)

  • 8:30 US Average Hourly Earnings. Estimate 0.2%
  • 8:30 US Nonfarm Employment Change. Estimate 175K
  • 8:30 US Unemployment Rate. Estimate 3.8%

*All release times are DST

*Key events are in bold

USD/JPY for Thursday, April 4, 2019

USD/JPY April 4 at 10:55 DST

Open: 111.49 High: 111.63 Low: 110.34 Close: 111.58

USD/JPY Technical

S3 S2 S1 R1 R2 R3
109.37 110.28 110.90 112.16 112.93 113.70

USD/JPY showed limited movement in the Asian and European sessions. The pair has posted small gains in North American trade

  • 110.90 is providing support
  • 112.16 is the next resistance line
  • Current range: 110.90 to 112.16

Further levels in both directions:

  • Below: 110.90, 110.28, 109.37 and 108.11
  • Above: 112.16, 112.93 and 113.70

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.