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USD/JPY calm ahead of Japanese consumer data

It has been a relatively quiet week for USD/JPY, which remains below the 106 line. Currently, the pair is trading at 105.46, down 0.13% on the day.  The focus on Thursday will be on Japanese consumer data, with the release Average Cash Earnings and Household Spending.

Investors braced for soft Japanese consumer data

Japanese consumers are holding tight on the purse strings, as the economic picture remains gloomy. Household Spending hasn’t managed to record a gain since September 2019 and plunged 16.2% in May. Another drop is expected, with a forecast of -7.8%. Average Cash Earnings, which measures employment income, fell by 2.1% in May, marking a second straight decline. Analysts are projecting a third successive decline, with an estimate of -3.0%.

Bank of Japan Governor Haruhiko Kuroda didn’t provide any encouraging words in a speech on Wednesday. Kuroda warned that the economic conditions could worsen if the government imposes severe health measures in order to contain Covid-19. Kuroda added that if the economic downturn continues due to the pandemic, the country’s financial system could be at risk. Japan is in the midst of a recession, with GDP posting declines in three consecutive quarters.

USD/JPY Technical

USD/JPY was up slightly in the Asian session but gave up these gains in European trade.

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 [4]

Market Analyst at OANDA [5]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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