USD/JPY- Yen remains adrift at 112, but will oil spike boost yen?

After a listless week for USD/JPY, the trend has continued on Monday. In the North American session, the pair is trading at 111.94, up 0.01% on the day. On the release front, it’s a quiet start to the week. The sole U.S. event was Existing Home Sales. The indicator slowed to 5.21 million in March, missing expectations and well below the February release of 5.51 million. On Tuesday, the Bank of Japan releases its preferred inflation indicator, BoJ Core CPI, with an estimate of 0.5%.

With the Japanese economy feeling the squeeze of the U.S.-China trade war and the BoJ offering negative interest rates, there isn’t much to attract investors to the yen unless risk appetite drops sharply. However, a spike in oil prices on Monday could be just what the doctor ordered. Crude oil prices jumped to a 5-month high after the Trump administration announced that it would terminate sanction waivers given to some importers of Iranian oil, as of May 1. This move is intended to further tighten sanctions against Iran and cripple Iranian oil exports. Higher oil prices could spook investors and boost the safe-haven Japanese currency.

The Bank of Japan will be in focus on Wednesday. The markets aren’t expecting any rate moves, but investors will be closely monitoring the rate statement and outlook report regarding the economic outlook. The BoJ recently downgraded its regional growth forecasts, and a dovish message from the BoJ could weigh on the yen.

Big Earnings, Rate Decisions and US GDP once markets return from holiday

Iran sanctions waivers hit sentiment in Asia

Trump’s Iranian decision basically ended the OPEC+ production cuts

Monday (April 22)

  • 10:00 US Existing Home Sales. Estimate 5.31M. Actual 5.21M

Tuesday (April 23)

  • 1:00 Bank of Japan Core CPI. Estimate 0.5%
  • 9:00 US HPI. Estimate 0.6%
  • 10:00 US New Home Sales. Estimate 647K
  • 19:50 Japanese Services Producer Price Index 1.1%

*All release times are DST

*Key events are in bold

USD/JPY for Monday, April 22, 2019

USD/JPY April 22 at 13:00 DST

Open: 111.93 High: 111.99 Low: 110.96 Close: 111.93

USD/JPY Technical

S3 S2 S1 R1 R2 R3
109.37 110.28 110.90 112.16 112.93 113.70

USD/JPY showed little movement in the Asian and European sessions. The pair is flat in North American trade

  • 110.90 is a weak support line
  • 112.16 is the next resistance line
  • Current range: 110.90 to 112.16

Further levels in both directions:

  • Below: 110.90, 110.28, 109.37 and 108.11
  • Above: 112.16, 112.93 and 113.70

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.