USD/JPY: Listless Yen Shrugs Off Retail Sales

USD/JPY is showing slight gains in the Wednesday session. In North American trade, the pair is trading at 109.60, up 0.20% on the day. On the release front, Japanese retail sales posted a strong gain of 1.3%, above the estimate of 0.9%. Japanese consumer confidence slipped to 41.9, shy of the estimate of 42.5 points. Later in the day, the BoJ releases the summary of opinions from the December meeting, and Japan publishes industrial production.

In the U.S., all eyes are on the Federal Reserve rate statement. With the Fed expected to remain on the sidelines, investors will be focusing on the rate statement, which is expected to be dovish in tone. The ADP (NASDAQ:ADP) nonfarm employment change fell to 213 thousand, but managed to beat the forecast of 180 thousand. On Thursday, the U.S. publishes Employment Cost Index and unemployment claims.

Investors are keeping an eye on the BoJ, which will provide a summary of the views of inpidual board members at the December meeting. Earlier in the week, the BoJ released the minutes from the BoJ meeting, with a message of “more of the same”. Policymakers stated that the bank would maintain its ultra-accommodative policy “for an extended period of time”. The BoJ also expressed concern about the Chinese slowdown and the negative impact it could have on the Japanese economy. Other members expressed concern over weak inflation, which remains well below the bank’s inflation target of around 2 percent. On Wednesday, the BoJ will provide more details of the December meeting, with a summary of the views of inpidual board members. The U.S-China trade war has weighed on Japan’s economy, and if the crisis continues, the economy could tip into recession. The key export sector is hurting, as exports fell in December to their lowest level in two years.

Japan is heavily dependent on smooth trade with both the U.S. and China, so policymakers are hopeful that trade talks in Washington will bear fruit. Chinese and U.S. officials are holding a second round of talks, and the stakes for the global economy are high. U.S. Treasury Secretary Steven Mnuchin said he expects significant progress in the talks, but warned that the sides would have to tackle “complicated issues”. Tensions between China and the U.S. have escalated in recent weeks, with the U.S. Justice Department filing criminal charges against Huawei, a Chinese technology company.

USD/JPY Fundamentals

Tuesday (January 29)

  • 18:50 Japanese Retail Sales. Estimate 0.9%. Actual 1.3%

Wednesday (January 30)

  • 00:00 Japanese Consumer Confidence. Estimate 42.5. Actual 41.9
  • 8:15 US ADP Nonfarm Employment Change. Estimate 180K. Actual 213K
  • 14:00 US FOMC Statement
  • 14:00 US Federal Funds Rate. Estimate <2.50%
  • 14:30 US FOMC Press Conference
  • 18:50 BoJ Summary of Opinions
  • 18:50 Japanese Preliminary Industrial Production. Estimate -0.5%

*All release times are EST

*Key events are in bold

USD/JPY for Wednesday, January 30, 2019


USD/JPY January 30 at 11:30 EST

Open: 109.39 High: 109.74 Low: 109.21 Close: 109.61

USD/JPY Technicals


USD/JPY showed limited movement in the Asian and European sessions. The pair has posted small gains in North American session

  • 109.37 was tested earlier in support
  • 110.28 is the next resistance line
  • Current range: 109.37 to 110.28

Further levels in both directions:

  • Below: 109.37, 108.11, 107.36 and 106.62
  • Above: 110.28, 110.90 and 112.16

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