USD/JPY – Japanese yen steady as markets calm at start of week

USD/JPY is showing limited movement in the Monday session. In the North American session, the pair is trading at 110.58, up 0.11% on the day. On the release front, Japanese Core Machinery Orders declined 0.1% in December, above the estimate of -1.1%. In December, the indicator was flat at 0.0%. In the U.S., banks are closed for a holiday and there are no U.S. events.

The Japanese manufacturing sector continues to struggle. Core Machinery Orders declined in December, following a flat 0.0% performance in November. The slowdown of China’s economy is chiefly to blame for a drop in Japan’s exports and manufacturing activity. Japanese exports of car parts and electronics to China are particularly vulnerable to the slowdown in China. There was positive news last week, as Japan’s economy grew 0.3% in the fourth quarter, after a decline of 0.6% in the third quarter. Business and consumer spending improved, helping the economy expand. Exports rose 0.9% in Q4, the strongest growth in a year. However, if the global trade war continues, Japanese growth could dramatically fall.

There are concerns about the strength of the U.S. economy, after soft consumer data in January. Retail sales and core retail sales showed sharp contraction, and these numbers came on the heels of soft inflation indicators. Inflation remains low, despite a strong labor market. CPI showed no change in January and has failed to post a gain since November. Core CPI has recorded weak gains of 0.2% for four successive months. On an annualized basis, CPI gained 1.6% in January, the weakest year-over-year gain since mid-2017. The soft inflation numbers were a result of low energy prices, which fell 3.1% in January as oil prices remain under pressure.

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Slow Start to Trading Week

USD/JPY Fundamentals

Sunday (February 17)

  • 18:50 Japanese Core Machinery Orders. Estimate -1.1%. Actual -0.1%

Monday (February 18)

  • There are no Japanese or U.S. events

*All release times are EST

*Key events are in bold

USD/JPY for Monday, February 18, 2019

USD/JPY February 18 at 9:45 EST

Open: 110.46 High: 111.62 Low: 110.46 Close: 110.59

USD/JPY Technical

S3 S2 S1 R1 R2 R3
108.11 109.37 110.28 110.90 112.16 112.93

USD/JPY showed limited movement in the Asian session. The pair was mostly flat in European session and has moved higher in North American trade

  • 110.28 is providing support
  • 110.90 has switched to a resistance role after losses by USD/JPY on Thursday
  • Current range: 110.28 to 110.90

Further levels in both directions:

  • Below: 110.28, 109.37, 108.11 and 107.36
  • Above: 110.90, 112.16 and 112.93

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.