USD/JPY – Japanese yen edges higher, U.S. retail sales impress

The Japanese yen is slightly higher in the Thursday session. In North American trade, USD/JPY is trading at 113.42, down 0.18% on the day. On the release front, it’s a busy day in the United States. Retail sales rebounded with a strong gain of 0.7% in October, after a decline of -0.1% a month earlier. Core retail sales jumped 0.8%, after a gain of 0.1% in September. Elsewhere, the Philly Fed Manufacturing Index fell sharply to 12.9, shy of the estimate of 20.1 points. Unemployment claims edged higher to 216 thousand, above the estimate of 213 thousand. This was the highest reading since August. There are no Japanese events on the schedule.

Japan’s economy contracted in the third quarter, as GDP fell 0.3%, which was in line with expectations. This marked the second decline in the past three quarters, raising alarm bells about the health of the Japanese economy. The contraction can be attributed to natural disasters which hit Japan, including an earthquake, as well as the toll from the escalating global trade war. This has taken a bite out of Japanese exports, as the U.S-China tariff battle has hurt the export-reliant Japanese economy. The yen managed to hold its own this week, shrugging off the poor GDP release.

On Wednesday, U.S consumer inflation numbers beat their estimates for October. The consumer price index posted a gain of 0.3%, its strongest gain since January. Core CPI, which excludes food and energy prices edged higher to 0.2%, marking a 3-month high. Both releases were in line with forecasts. Core CPI was 2.1% higher than a year ago, and this solid release means that the Fed remains on track to continue raising interest rates. The Federal Reserve holds its next policy meeting in December, with the odds of a December rate hike at 72%, according to the CME Group.

European open – Brexit deal, Italy budget and oil

Sterling braces for wild moves after cabinet meeting

Pound plummets on Brexit resignations

USD/JPY Fundamentals

Thursday (November 15)

  • 8:30 US Core Retail Sales. Estimate 0.5%. Actual 0.7%
  • 8:30 US Retail Sales. Estimate 0.6%. Actual 0.8%
  • 8:30 US Philly Fed Manufacturing Index. Estimate 20.1. Actual 12.9
  • 8:30 US Empire State Manufacturing Index. Estimate 19.9. Actual 23.3
  • 8:30 US Import Prices. Estimate 0.1%. Actual 0.5%
  • 8:30 US Unemployment Claims. Estimate 213K. Actual 216K
  • 10:00 US FOMC Member Quarles Speaks
  • 10:00 US Business Inventories. Estimate 0.3%. Actual 0.3%
  • 10:30 US Natural Gas Storage. Estimate 35B
  • 11:00 US Crude Oil Inventories. Estimate 2.9M
  • 11:30 US Fed Chair Powell Speaks
  • 13:00 US FOMC Member Bostic Speaks

*All release times are DST

*Key events are in bold

USD/JPY for Thursday, November 15, 2018

USD/JPY November 15 at 11:45 DST

Open: 113.63 High: 113.67 Low: 113.10 Close: 113.42

USD/JPY Technical

S3 S2 S1 R1 R2 R3
110.28 111.20 112.30 113.75 114.73 115.50

USD/JPY showed little movement in the Asian and European sessions. The pair edged lower in the North American session but has recovered

  • 112.30 is providing support
  • 113.75 is the next line of resistance
  • Current range: 112.30 to 113.75

Further levels in both directions:

  • Below: 112.30, 111.20, 110.28 and 109.32
  • Above: 113.75, 114.73 and 115.50

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 and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.