After a listless week for USD/JPY, the trend has continued on Monday. In the North American session, the pair is trading at 111.94, up 0.01% on the day. On the release front, it’s a quiet start to the week. The sole U.S. event was Existing Home Sales. The indicator slowed to 5.21 million in March, missing expectations and well below the February release of 5.51 million. On Tuesday, the Bank of Japan releases its preferred inflation indicator, BoJ Core CPI, with an estimate of 0.5%.
With the Japanese economy feeling the squeeze of the U.S.-China trade war and the BoJ offering negative interest rates, there isn’t much to attract investors to the yen unless risk appetite drops sharply. However, a spike in oil prices on Monday could be just what the doctor ordered. Crude oil prices jumped to a 5-month high after the Trump administration announced that it would terminate sanction waivers given to some importers of Iranian oil, as of May 1. This move is intended to further tighten sanctions against Iran and cripple Iranian oil exports. Higher oil prices could spook investors and boost the safe-haven Japanese currency.
The Bank of Japan will be in focus on Wednesday. The markets aren’t expecting any rate moves, but investors will be closely monitoring the rate statement and outlook report regarding the economic outlook. The BoJ recently downgraded its regional growth forecasts, and a dovish message from the BoJ could weigh on the yen.
Monday (April 22)
- 10:00 US Existing Home Sales. Estimate 5.31M. Actual 5.21M
Tuesday (April 23)
- 1:00 Bank of Japan Core CPI. Estimate 0.5%
- 9:00 US HPI. Estimate 0.6%
- 10:00 US New Home Sales. Estimate 647K
- 19:50 Japanese Services Producer Price Index 1.1%
*All release times are DST
*Key events are in bold
USD/JPY for Monday, April 22, 2019
USD/JPY April 22 at 13:00 DST
Open: 111.93 High: 111.99 Low: 110.96 Close: 111.93
USD/JPY showed little movement in the Asian and European sessions. The pair is flat in North American trade
- 110.90 is a weak support line
- 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
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