USD/JPY - Flat Yen Shrugs Off Weak Japanese Data

 |  Includes: FXY, UDN, UUP
by: Dean Popplewell

The Japanese yen is listless on Monday, as the pair trades slightly above the 104 line in the European session. On the release front, Tertiary Industry Activity disappointed, coming in at -0.1% in July. Consumer Confidence showed little change, missing expectations. Later in the day, we'll get a look at PPI, with the markets expecting a strong gain of 4.4%. In the US, there are no economic releases to start off the week. The sole US event on Monday is a speech by Federal Reserve Governor Stanley Fischer, who will speak at a conference in Tokyo.

Japanese releases started off the week with disappointing numbers. Tertiary Industry Activity, an important manufacturing indicator, posted a decline of 0.1%, short of the estimate of a 0.2% gain. This weak reading was a sharp drop from the strong gain of 0.9% a month earlier. Elsewhere, Consumer Confidence came in at 41.5 points, short of the forecast of 42.3 points. The good news is that the indicator has moved upwards for three consecutive months. We'll get a look at the BOJ minutes on Tuesday.

US releases enjoyed a solid week, led by the ISM Non-Manufacturing PMI and Unemployment Claims. The PMI, which measures the strength of the services sector, climbed to 58.6 points, a ten-month high. Unemployment Claims dropped to 289 thousand, beating the estimate of 305 thousand. The four-week claims average, which is less volatile than the weekly count, dipped to 293,500, its lowest level since February 2006. The improving labor market points to a growing economy, and the dollar has gained broad strength thanks to solid economic data.

USD/JPY for Monday, August 11, 2014

USD/JPY August 11 at 12:10 GMT

USD/JPY 102.13 H: 102.19 L: 102.02

USD/JPY Technical

S3 S2 S1 R1 R2 R3
98.84 100.00 101.19 102.53 103.07 104.17
Click to enlarge
  • USD/JPY has shown almost no change in the Asian and European sessions.
  • 101.19 remains a strong support level.
  • 102.53 is an immediate resistance line. 103.07 is stronger.
  • Current range: 101.19 to 102.053

Further levels in both directions:

  • Below: 101.19, 100, 98.84 and 98.09
  • Above: 102.53, 103.07, 104.17 and 105.7

OANDA's Open Positions Ratio

USD/JPY ratio is pointing to gains in short positions on Monday. This is consistent with the movement we're seeing from the pair, as the yen has posted small losses. The ratio continues to have a majority of long positions, indicating trader bias towards the dollar posting gains.

USD/JPY Fundamentals

  • 5:00 BOJ Monthly Report.
  • 5:00 Japanese Consumer Confidence. Estimate 42.3 points. Actual 41.5 points.
  • 6:00 Japanese Preliminary Machine Tool Orders. Actual 37.7%.
  • 7:15 US Federal Reserve Governor Member Stanley Fischer Speaks.
  • 23:50 Japanese PPI. Estimate 4.4%.

* Key releases are highlighted in bold

*All release times are GMT

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.