USD/JPY – Japanese yen edges lower as U.S. personal spending sparkles

USD/JPY is slightly higher on Monday. In North American trade, the pair is trading at 111.79, down 0.18% on the day. On the release front, there are no Japanese events. In the U.S., the Core PCE Price Index was within expectations. This indicator is closely watched, as it is the Federal Reserve’s preferred gauge of inflation. Personal spending sparkled in March, with a gain of 0.9%. This beat the estimate of 0.7% and was the strongest gain since May 2015. On Tuesday, the U.S. releases Chicago PMI and CB Consumer Confidence.

Is a U.S-China trade deal around the corner? Negotiations will continue on April 30, in Beijing, and U.S. Treasury Secretary Mnuchin waxed positive on Sunday, saying that the talks were in their “final laps”. However, Mnuchin cautioned that the talks could still end without an agreement. The nasty trade war between the two largest economies in the world has rocked the global economy and curbed growth. If the sides continue to make progress, there could be a summit between President Trump and President Xi of China. A new trade agreement between the U.S. and China would likely see investor risk appetite soar, which would be bearish for the safe-haven Japanese yen.

Meanwhile, U.S. numbers impressed late last week, as the U.S. dollar made broad gains. Durable goods orders climbed 2.7%, crushing the estimate of 0.7%. Core durable goods orders gained 0.4%, marking a 9-month high. This was followed by an initial GDP release of 3.2% in Q1, well above the estimate of 2.2%. This was much stronger than Final GDP for Q4, which came in at 2.2%.

Dodging the information avalanche

A massive week for currencies, stocks and bonds

Monday (April 29)

  • 8:30 (Feb. Data) – US Core PCE Price Index. Estimate 0.2%. Actual 0.1%
  • 8:30 US Core PCE Price Index. Estimate 0.1%. Actual 0.1%
  • 8:30 (Feb. Data) – US Personal Spending. Estimate 0.2%. Actual 0.0%
  • 8:30 US Personal Spending. Estimate 0.7%. Actual 0.9%
  • 8:30 US Personal Income. Estimate 0.4%. Actual 0.1%

Tuesday (April 30)

  • 8:30 US Employment Cost Index. Estimate 0.7%
  • 9:45 US Chicago PMI. Estimate 59.1
  • 10:00 US CB Consumer Confidence. Estimate 126.2

*All release times are DST

*Key events are in bold

USD/JPY for Monday, April 29, 2019

USD/JPY April 29 at 11:40 DST

Open: 111.59 High: 111.90 Low: 111.55 Close: 111.79

USD/JPY Technical

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

USD/JPY was flat in the Asian session. The pair posted slight gains in European trade and is steady in North American trade

  • 110.90 is providing support
  • 112.16 is the weak 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.