USD/JPY- Yen at 3-week high as dollar sputters

The Japanese yen has posted slight losses in the Monday session. In North American trade, USD/JPY is trading at 112.48, down 0.32% on the day. On the release front, Japan’s trade surplus rose to JPY 0.30 trillion, lower than the estimate of JPY 0.48 trillion. There are no major U.S. events on the schedule. On Tuesday, the U.S. releases building permits and housing starts.

The Bank of Japan has no plans to alter its ultra-accommodative monetary policy, as inflation remains well below the BoJ target of around 2 percent. However, there have been negative side effects to this stance, primarily the toll on bank profits, which has raised concerns that banks might take excessive risks in order to recoup lost profits. BoJ Governor Haruhiko Kuroda addressed this issue on Monday, warning that risk management steps were needed in order to maintain the stability of the financial system and ensure that borrowing costs did not climb sharply.

In the U.S., consumer inflation and spending numbers were strong in October. On Thursday, the U.S released retail sales reports. 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. There was good news from the inflation front on Wednesday, as 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. The solid consumer data 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 69%, slightly lower compared to last week.

Pound steady at start of potentially volatile week

The Feds telegraph hesitancy, OPEC supply cut and a cacophony of deafening US-China alarm bells


USD/JPY Fundamentals

Sunday (November 18)

  • 18:50 Japanese Trade Balance. Estimate -0.48T. Actual -0.30T

Monday (November 19)

  • 10:00 US NAHB Housing Market Index.Estimate 67
  • 10:45 US FOMC Member Williams Speaks

Tuesday (November 20)

  • 8:30 US Building Permits. Estimate 1.26M
  • 8:30 US Housing Starts. Estimate 1.23M

*All release times are EST

*Key events are in bold

USD/JPY for Monday, November 19, 2018

USD/JPY November 19 at 10:30 DST

Open: 112.83 High: 112.88 Low: 112.45 Close: 112.48

USD/JPY Technical

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

USD/JPY was mostly flat in the Asian and European sessions. The pair has edged lower in North American trade

  • 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.