USDJPY Movement
For the 24 hours to 23:00 GMT, the USD weakened 0.42% against the JPY and closed at 101.48 as traders speculated that the Fed may abandon its 6.5% unemployment target which it uses as a benchmark for its interest rate policy.
Yesterday, the US Dollar was buoyed by the release of robust inflation and building permit data.
In the Asian session, at GMT0400, the pair is trading at 101.36, with the USD trading 0.11% lower from yesterday’s close.
This morning, the BoJ Board Member, Takahide Kiuchi stated that the central bank could opt for zero interest rates and phase out large-scale asset purchases if the current aggressive easing policy is successful in reaching 2% sustained inflation by 2015. Furthermore, he warned that any additional quantitative easing would entail risks and then it would be quite difficult to reverse the policies. Additionally, he noted that the Japan’s exports would continue to remain weak as China’s manufacturing sector is slowing and other emerging countries still suffering from economic imbalances.
On the macro front, the Ministry of Finance reported that Japan’s merchandise (total) trade deficit narrowed to ¥800.3 billion in February, from a revised deficit of ¥2791.7 billion recorded in the previous month. Markets had expected Japan’s merchandise (total) trade deficit to narrow to ¥600.9 billion in February.
Additionally, the Cabinet Office of Japan reported that final leading economic index in Japan rose to a level of 113.1 in January, higher than the flash estimate of 112.2, while the final coincident index rose to a level of 115.2 in January, compared to a revised level of 112.2 recorded in the previous month.
The pair is expected to find support at 101.13, and a fall through could take it to the next support level of 100.90. The pair is expected to find its first resistance at 101.74, and a rise through could take it to the next resistance level of 102.11.
The currency pair is showing convergence with its 20 Hr moving average and is trading below its 50 Hr moving average.
