USD/JPY – Steady in Cautious Trading

USD/JPY is steady in Wednesday trading, as the pair trades in the high-102 range in the European session. With no major events on today’s schedule, the markets are keeping an eye on US retail sales and unemployment claims, which will be released on Thursday.

There were no surprises from the BOJ, which released its Monetary Policy Statement on Tuesday. The BOJ said it would continue to expand monetary policy by 60-70 trillion each year. The Bank sounded optimistic about the economy, noting that economic growth and inflation are in line with its forecasts. The BOJ’s aggressive monetary policy has severely weakened the yen, and we could see the currency continue to struggle against the US dollar.

Tuesday’s US employment numbers disappointed, as JOLTS Job Openings dipped to 3.97 million in February. This fell short of the estimate of 4.02 million and marked a three-month low. On Friday, Nonfarm Payrolls jumped to 175 thousand in February, compared to just 113 thousand last month. This easily beat the estimate of 151 thousand. The Unemployment Rate edged up to 6.7%, up from 6.6% in the previous reading. With the markets expecting the Fed to trim QE next week, every employment release should be treated as a market-mover.

With the US posting solid Unemployment Claims and Nonfarm Payrolls late last week, the markets can breathe more comfortably as the Fed is likely to take its scissors and trim QE next week for the third time. New York Fed President William Dudley stated last week that the threshold to alter the Fed’s program to wind up QE was “pretty high”. In other words, short of a serious economic downturn in the US economy, we can expect the QE tapers to continue.

USD/JPY for Wednesday, March 12, 2014

USD/JPY March 12 at 12:20 GMT

USD/JPY 102.75 H: 103.10 L: 102.66

USD/JPY Technical

• The pair is facing resistance at 103.30. This is followed by a resistance line at 104.17, which has remained intact since late January.
• 102.53 is providing support. This is a weak line which could face pressure during the day. The next support level is at 101.19.
• Current range: 102.53 to 103.30

Further levels in both directions:

• Below: 102.53, 101.19, 100.00, 99.57 and 98.65
• Above: 103.30, 104.17, 105.70, 106.85

OANDA’s Open Positions Ratio

Long positions make up slightly more than half of the open positions in the ratio, indicating a weak trader bias towards the dollar moving higher.

USD/JPY continues to trade at high levels. The pair is steady in the European session.

USD/JPY Fundamentals

• 5:00 Japanese BOJ Monthly Report.
• 5:00 Japanese Consumer Confidence. Estimate 40.3 points. Actual 38.3 points.
• 14:30 US Crude Oil Inventories. Estimate 2.1M.
• 17:01 US 10-year Bond Auction.
• 18:00 US Treasury Secretary Jack Lew Speaks.
• 23:50 Japanese Core Machinery Orders. Estimate 7.3%.

*Key releases are highlighted in bold

*All release times are GMT

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.