Yen Weakens As Japanese Consumer Spending Slips
MarketPulse | Jul 29, 2014 10:22AM ET
USD/JPY has posted gains on Tuesday, as the pair has pushed above the 102 line and hit three-week highs. The dollar took advantage of disappointing Japanese consumer spending in June. On Tuesday, Japan will release Preliminary Industrial Production. Over in the US, today's highlight is CB Consumer Confidence. The markets are expecting another strong showing from the June release.
Japanese data was dismal on Tuesday, as consumers continue to keep a tight grip on the purse strings. Household Spending declined by 3.0%, the third straight drop. The figure did beat the estimate of -3.7%. Retail Sales, the primary gauge of consumer spending, posted a decline of -0.6%, worse than the estimate of -0.4%. This was also a third straight decline. As well, Unemployment Rate rose to 3.7%, above the estimate of 3.5% and the highest level recorded since January. These figures point to trouble, as less consumer spending will likely translate into decreased economic growth and put more pressure on the Japanese currency.
We could see some strong movement in the currency markets on Wednesday, with three key events on the calendar. The Federal Reserve will release a policy statement and we'll get a look at Advance GDP and the ADP Nonfarm Payrolls. If these releases surprise the markets, we could increased activity from USD/JPY.
- USD/JPY 102.04 H: 102.12 L: 101.82
USD/JPY Technicals
| S3 | S2 | S1 | R1 | R2 | R3 |
| 99.57 | 100.00 | 101.19 | 102.53 | 103.07 | 104.17 |
- USD/JPY edged higher in the Asian session. The pair has continued to post gains in European trading and crossed above the 102 line.
- 102.53 continues to provide resistance.
- 101.19 is providing strong support.
- Current range: 101.19 to 102.53
Get The News You Want
Further levels in both directions:
- Below: 101.19, 100.00, 99.57 and 98.97
- Above: 102.53, 103.07, 104.17 and 105.70
OANDA's Open Positions Ratio
USD/JPY ratio is pointing to gains in short positions in Tuesday trade. This is not consistent with the movement the pair, as the yen has lost ground. The ratio is made up of a large majority of long positions, indicating strong trader bias towards the dollar continuing to move to higher ground.
USD/JPY Fundamentals
- 13:00 US S&P/CS Composite-20 HPI. Estimate 9.8%. Actual 9.3%.
- 14:00 US CB Consumer Confidence. Estimate 85.5 points.
- 23:50 Japanese Preliminary Industrial Production. Estimate -1.0%.
* Key releases are highlighted in bold
*All release times are GMT
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.