USDJPY Movement
On Friday, the USD strengthened 1.15% against the JPY and closed at 102.90, after the US unemployment rate decline more-than-expected to 7.0%, bolstering bets for an early Fed tapering.
During the weekend, the Bank of Japan (BoJ) Governor, Haruhiko Kuroda, cautioned that existing the current ultra-easy monetary policy would be far more difficult for the BoJ when compared with its previous quantitative easing launched from 2001 to 2006. He additionally suggested that central banks should avoid offering overly complicated forward guidance on their policies, as these “could be less efficient and sometimes even disruptive” for the financial markets.
In the Asian session, at GMT0400, the pair is trading at 103.00, with the USD trading 0.10% higher from Friday’s close. Earlier today, an official report from Japan showed that the nation’s gross domestic product rose 0.3% (QoQ) in the third quarter, failing to meet analysts’ projection for the GDP to rise 0.4%. Similarly, on an annualised basis, Japan’s GDP rose less-than-expected 1.1% in the third quarter, compared to a 1.9% rise witnessed in the second quarter. Separately, Japan’s Cabinet Office reported that its Eco Watchers Survey for the nation’s current economic situation rose more-than-expected to a reading of 53.5 in November, compared to a reading of 51.8 registered in October. Similarly, Cabinet Office’s Eco Watchers Survey for the outlook of Japan’s economy rose to 54.8 in November, from previous month’s level of 54.5.
Meanwhile, a former BoJ official, Tohru Sasaki, hinted that the yen would rally to 100 per USD in the first half of next year as the central bank would not be able to expand its monetary easing programme by enough to repeat this year’s success.
The pair is expected to find support at 102.12, and a fall through could take it to the next support level of 101.23. The pair is expected to find its first resistance at 103.56, and a rise through could take it to the next resistance level of 104.13.
Market participants await the release of a report on Japan’s tertiary industry index, which is widely estimated to rise 0.3% (MoM) in October, following a 0.2% drop seen in the preceding month,
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
