USD/JPY – Yen Subdued After Dollar Gains

USD/JPY is showing little movement in the Monday session. In North American trade, USD/JPY is trading at 113.00, down 0.06% on the day. On the release front, there are no major US or Japanese events. On Tuesday, the US releases JOLTS Jobs Openings.

On Friday, the US posted mixed employment numbers. Nonfarm Payrolls dropped to 148 thousand, down from 228 thousand in the previous release. This was well below the estimate of 190 thousand. There was better news from wage growth, which edged up to 0.3%, matching the forecast. This marked a 3-month high. The unemployment rate remained unchanged, at a sizzling 4.1%.

As we begin the New Year, what can investors expect from the Bank of Japan? BoJ Governor Haruhiko Kuroda has generally stuck to his script that the Bank will maintain its massive stimulus program until inflation rises, but there have been subtle hints form Kuroda that he could change course, if the economic rebound which marked 2017 continues. The stimulus program has failed to lift inflation above 1%, well below the BoJ inflation target of around 2%. Some analysts expect a ‘stealth tapering’, whereby the BoJ would reduce asset purchases and tighten policy, but in small, incremental steps. In this way, the BoJ could change its monetary stance, while minimizing market volatility.

Bank of Japan Governor Haruhiko Kuroda is slated to end his 5-year term in April, but will he be staying on? The Japanese government hasn’t made up its mind, and Prime Minister Shinzo Abe said as much on Sunday. Abe said that Kuroda  has met his expectations, but admitted that he had not made up his mind about the reappointment. With Japan posting seven straight quarters of growth and inflation moving higher, there’s a strong likelihood that Kuroda will be given the green light for another term at the helm of the central bank.

 

USD/JPY Fundamentals

Monday (January 8)

  • 12:40 US FOMC Member Raphael Bostic Speaks
  • 13:35 US FOMC Member John Williams Speaks
  • 15:00 US Consumer Credit. Estimate 17.8
  • 19:00 Japanese Average Cash Earnings. Estimate 0.6%

Tuesday (January 9)

  • 10:00 US JOLTS Job Openings. Estimate 6.05M

*All release times are GMT

*Key events are in bold

USD/JPY for Monday, January 8, 2018

USD/JPY January 8 at 10:55 EDT

Open: 113.07 High: 113.38 Low: 112.88 Close: 113.00

USD/JPY Technical

S3 S2 S1 R1 R2 R3
110.10 111.53 112.57 113.55 114.59 115.50

USD/JPY was flat in the Asian session. The pair posted small gains in the European session but then retracted. In North American trade, USD/JPY is showing little movement.

  • 112.57 is providing support
  • 113.55 is the next line in resistance

Current range: 112.57 to 113.55

Further levels in both directions:

  • Below: 112.57, 111.53, 110.10 and 109.11
  • Above: 113.55, 114.59 and 115.50

OANDA’s Open Positions Ratios

In the Monday session, USD/JPY ratio is  showing long positions with a majority (54%). This is indicative of trader bias towards USD/JPY reversing directions and moving lower.

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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.