USDJPY Movement
For the 24 hours to 23:00 GMT, the USD strengthened 0.38% against the JPY and closed at 104.92, after data revealed that the number of people filing initial unemployment benefits last week fell for the first time in three weeks.
Early yesterday, the Japanese Yen lost momentum, after the minutes of the Bank of Japan’s (BoJ) November policy meeting revealed that that not all board members were convinced that the country’s growth was on a long-term upward trend. Meanwhile, investor sentiment was further affected following comments made by the Governor Haruhiko Kuroda, who indicated that the nation’s economy was not yet out of deflationary risks.
Meanwhile, on the economic front, the housing starts in Japan increased 14.1% on an annual basis in November, more than market expectation of a 9.2% rise and compared to a 7.1% increase recorded in the previous month.
Furthermore, the Nomura/ JMMA reported that the manufacturing Purchasing Managers’ Index (PMI) in Japan rose to a reading of 55.2 in December, compared to a final reading of 55.1 reported in the previous month. Moreover, the Statistics Bureau Japan indicated that the national consumer price index (CPI) on an annual basis rose 1.5% in November, following a 1.1% rise recorded in the preceding month. Meanwhile, the household spending rose 0.2% in November, compared to a rise of 0.9% recorded in the preceding month. Markets were expecting household spending to rise 1.7% in November. Further, the seasonally adjusted unemployment rate in Japan remained unchanged at 4.0% in November, compared to a similar rate recorded in the previous month. Markets were expecting the unemployment rate to fall to 3.9% in November.
The Ministry of Economy, Trade and Industry of Japan reported that on an annual basis, preliminary industrial production rose 5.0% in November, compared to a 5.4% increase reported in the previous month. Similarly, the retail trade rose 4.0% in November, compared to a revised 2.4% increase recorded in the previous month. Markets were expecting retail trade to rise 2.9% in November.
In the Asian session, at GMT0400, the pair is trading at 104.77, with the USD trading 0.14% lower from yesterday’s close.
The pair is expected to find support at 104.62, and a fall through could take it to the next support level of 104.48. The pair is expected to find its first resistance at 104.98, and a rise through could take it to the next resistance level of 105.19.
With little on the economic front in both the US and Japan, the pair would take direction from news emanating from across the world
The currency pair is showing convergence with its 20 Hr moving average and is trading above its 50 Hr moving average.
