MarketPulse | Jan 12, 2018 01:12AM ET
USD/JPY has taken a pause after sharp losses in the Thursday session. In North American trade, USD/JPY is trading at 111.38, down 0.05% on the day. In the US, PPI and Core PPI both missed their estimates, with declines of 0.01%. On the employment front, unemployment claims jumped to 261 thousand, above the forecast of 246 thousand. Later in the day, Japan releases Bank Lending and Current Lending. On Friday, the US releases key consumer indicators for December, with the release of CPI and retail sales reports.
On Wednesday, the yen soared to its highest level since late November. The Japanese currency has gained 1.6% this week. The catalyst for the rally was a report China that it was considering slowing or halting the purchase of US government bonds. China boasts the largest currency reserves, estimated at $3 trillion. It is also the biggest holder of US government bonds, in the amount of $1.19 trillion. Why would China make this move? One reason is that it may consider US treasuries less attractive compared to other assets. As well, it could be part of China’s strategy to flex some muscle as a possible trade war looms between the US and China, which are the two largest economies in the world. The report has pushed US Treasury yields higher and sent the US dollar downwards.
The yen also benefited this week after the BoJ decided to reduce its bond purchases, raising speculation that the Bank will taper its massive stimulus program. The Bank trimmed its purchase of 10 to 25 year bonds and 25 to 40 bonds by JPY 10 billion yen each, to JPY 190 billion yen and 80 billion respectively. The cuts to the 10-25 year bonds was the first in more than a year. If the BoJ does reduce stimulus, the yen could respond with sharp gains.
USD/JPY Fundamentals
Thursday (January 11)
Friday (January 12)
*All release times are GMT
*Key events are in bold
USD/JPY for Thursday, January 11, 2018
USD/JPY January 11 at 11:15 EDT
Open: 111.43 High: 111.88 Low: 111.32 Close: 111.38
USD/JPY Technical
S3 | S2 | S1 | R1 | R2 | R3 |
108.21 | 109.11 | 110.10 | 111.53 | 112.57 | 113.55 |
USD/JPY posted gains in the Asian session but retracted in European trade. The pair has ticked lower in North American trade.
Current range: 110.10 to 111.53
Further levels in both directions:
OANDA’s Open Positions Ratios
USD/JPY ratio is showing movement towards long positions. Currently, long positions have a majority (59%), indicative of trader bias towards USD/JPY reversing directions and moving higher.
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.