USDJPY Movement
For the 24 hours to 23:00 GMT, the USD strengthened 0.22% against the JPY and closed at 96.92. The Japanese Yen came under pressure after the International Monetary Fund (IMF) slashed its growth forecast on the Japanese economy for 2013 by 0.1 point to 2.0%, saying the economy will slow down due to factors such as the planned sales tax hike next April. However, the international body hiked its estimate on Japan’s growth for next year by 0.1 point to 1.2%.
On the economic front, an official report from Japan revealed that the Eco watchers survey: outlook advanced to a reading of 54.2 in September, from a level of 51.2 registered in the previous month. Separately, another report on the Eco watchers survey: current surged to a level of 52.8 in September, more than analysts’ call for a rise to 52.0 and compared to a level of 51.2 seen in the previous month.
In the Asian session, at GMT0300, the pair is trading at 97.36, with the USD trading 0.45% higher from yesterday’s close. Earlier today, minutes from the Bank of Japan’s (BoJ) latest policy meeting, revealed that the Japanese economy is expected to continue with a moderate recovery and the CPI (YoY) is also likely to rise gradually. The minutes failed to offer further insights into the central bank’s future policy action. Additionally, BoJ Deputy Governor, Hiroshi Nakaso, stated that failure by the US to lift its debt ceiling would have a significant adverse effect on the global economy, including Japan, by pushing up long-term interest rates and creating volatility in foreign exchange rates.
The pair is expected to find support at 96.97, and a fall through could take it to the next support level of 96.59. The pair is expected to find its first resistance at 97.58, and a rise through could take it to the next resistance level of 97.80.
Traders are expected to keep a close watch on the release of Japan’s machine tool orders, due later today for further guidance in the yen.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
