USDJPY Movement
For the 24 hours to 23:00 GMT, the USD strengthened 0.89% against the JPY and closed at 98.51, after the Federal Reserve officials’ stated that the US economic recovery is not strong enough to start tapering bond-buying.
The President of the Federal Reserve (Fed) Bank of Richmond, Jeffrey Lacker, stated that he expects the US economic growth to remain sluggish for more couple of years, and that the central bank is far from reducing its balance sheet size yet.
Separately, the New York Federal Reserve (Fed) President William Dudley, indicated that any Fed decision to taper the pace of its asset purchases would depend on the outlook of the economy rather than the timeline Fed Chairman Ben Bernanke outlined last week. He also added that if labour market conditions and the economy’s growth momentum were to be less favourable than in the FOMC’s outlook, then the asset purchase programme would continue at a higher pace for a longer time
In Japan, the all industry activity index rose 0.4% (MoM) in April, in line with the market forecast and from a revised 0.2% rise in March.
In the Asian session, at GMT0300, the pair is trading at 98.84, with the USD trading 0.33% higher from yesterday’s close.
In the morning releases, Japan’s manufacturing purchasing managers’ index rose to 52.3 in June, while the consumer price index dropped 0.3% (YoY) in May. Moreover, industrial production registered a more-than-expected rise in May whereas household spending unexpectedly dropped in May. On the jobs front, the unemployment rate remained stable at 4.1%, while job-to-applicant ratio increased in line with market expectations in May.
The pair is expected to find support at 98.00, and a fall through could take it to the next support level of 97.17. The pair is expected to find its first resistance at 99.33, and a rise through could take it to the next resistance level of 99.83.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
