USDJPY Movement
For the 24 hours to 23:00 GMT, the USD weakened 0.10% against the JPY and closed at 93.24. Yesterday, former Bank of Japan Deputy Governor, Kazumasa Iwata stated that the Yen is overvalued from a trade perspective and the correction of the currency’s strength is essential for the Bank of Japan (BoJ) to achieve its 2-percent inflation target.
In the Asian session, at GMT0400, the pair is trading at 93.51, with the USD trading 0.30% higher from yesterday’s close.
Economic data released this morning revealed that Japanese economy contracted for the third consecutive quarter in December, indicating that the country is struggling to escape from a mild recession and bolstering the new government’s push for radical policy steps to revive growth. The gross domestic product (GDP) contracted 0.1% in the fourth quarter of 2012, compared to a downwardly revised same rate of drop in the previous quarter. Market had expected the GDP to come in flat in 4Q FY2012.
Additionally, the Bank of Japan (BoJ) held its interest rate steady in a range of 0.0 to 0.1%, in line with market expectations and also kept the size of its asset purchase program unchanged.
The pair is expected to find support at 92.96, and a fall through could take it to the next support level of 92.40. The pair is expected to find its first resistance at 93.93, and a rise through could take it to the next resistance level of 94.35.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
