USDJPY Movement
For the 24 hours to 23:00 GMT, the USD declined 0.11% against the JPY and closed at 113.21.
In economic news, Japan’s unemployment rate recorded an unexpected drop to 2.7% in November, hitting its lowest level since November 1993, suggesting that robust economic recovery in the world’s third largest economy is strengthening the nation’s labour market. Market participants had expected the unemployment rate to remain steady at 2.8%. Moreover, the nation’s national consumer price index (CPI) rose more-than-expected by 0.6% on an annual basis in November, but remained far from the Bank of Japan’s (BoJ) 2.0% inflation target. In the previous month, the CPI had recorded a rise of 0.2%, compared to market consensus for a rise of 0.5%.
Separately, according to minutes of the Bank of Japan’s (BoJ) October meeting, officials stressed the need to stick to the central bank’s ultra-loose monetary policy until it reaches the inflation target.
On Monday, data showed that the nation’s final coincident index rose less than initially estimated to a level of 116.4 in October, compared to a level of 116.2 in the previous month, while the preliminary figures had indicated an advance to 116.5. Meanwhile, the nation’s final leading economic index surprisingly climbed to a level of 106.5 in October, while the preliminary print had indicated a drop to a level of 106.1. In the prior month, the index had registered a reading of 106.4.
In the Asian session, at GMT0400, the pair is trading at 113.26, with the USD trading slightly higher against the JPY from yesterday’s close.
The pair is expected to find support at 113.13, and a fall through could take it to the next support level of 113.01. The pair is expected to find its first resistance at 113.37, and a rise through could take it to the next resistance level of 113.49.
Moving ahead, investors would focus on the BoJ’s summary of opinions report of its December meeting along with Japan’s flash industrial production, retail trade and large retailers’ sales, all for November, due to release overnight.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
