Japanese yen drifting, Fed minutes next

The Japanese yen continues to have a quiet week and is trading at 115.46 in the North American session, down 0.12% on the day.

What next for Ukraine?

The US dollar enjoyed a boost earlier in the week as tensions between Russia and the West reached a fever pitch. Now that the situation has stabilized somewhat, investors are breathing easier and the dollar has lost ground. Still, there is apprehension in the air and a lack of clarity as to what happens next. Russia says that it has moved some troops away from attack positions, but the US says there is no proof of this. President Biden took to the airwaves on Tuesday and warned the Russians of severe consequences if it attacked Ukraine while saying it was not too late to reach a diplomatic solution.

US retail reports sparkle

In the US, a strong retail sales report for January provided something for investors to digest other than news from Ukraine. Retail Sales jumped 3.8% m/m, crushing the estimate of 2.0% and rebounding from the 2.5% decline in December. High inflation helped boost the retail sales numbers, but consumers are buying more goods and services as well.

Investors will now shift their attention to the Fed minutes, which will be released later today. We’ve been hearing a hawkish message from some FOMC members of late, and the minutes could well reflect the hawkish pivot that the Fed has reluctantly embraced due to red-hot inflation. Fed Chair Jerome Powell recently abandoned his stance that inflation was transitory and a March liftoff for hikes is essentially a done deal. The markets have priced in six hikes, although some FOMC members have suggested that three or four hikes will suffice to rein in inflation close to the Fed’s target of 2 per cent.

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USD/JPY Technical

  • There is weak resistance at 115.56. Above, there is resistance at 114.52
  • There is support at 112.87 and 112.26

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

Market Analyst at OANDA
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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