USD/JPY – Yen Darts Above 100 Before Retracting

USD/JPY continues to flirt with the 100 level. The pair briefly pushed above the 100 level early on Monday, but then retracted. In the European session, the pair is trading in the mid-99 range. On Friday, US Non-Farm Payrolls disappointed, missing the estimate. Japan releases were a mix. Final GDP posted a strong gain and Current Account edged out the estimate. However, Economy Watchers Sentiment and Consumer Confidence both fell short of their estimates. In the US there is one minor release later today, Consumer Credit.

Japan started the week on a busy note, as two major releases, Current Account and Final GDP, looked solid. Current Account dropped to 0.33 trillion yen, edging out the estimate of 0.32 trillion. Final GDP posted a strong gain of 0.9%, just shy of the estimate of 1.0%. Last month’s Final GDP rose 1.0%, pointing to an economy moving in the right direction. Consumer Confidence and Economy Watchers Sentiment both missed their estimates, but these are minor releases and unlikely to have much effect on USD/JPY. Later on Monday, Japan releases the BOJ Monetary Policy Meeting Minutes and Tertiary Industry Activity, both of which are market-movers.

Over the weekend, Tokyo emerged as the winning bid for the 2020 Summer Olympics, in a move that could boost the Japanese economy. Hosting one of the most prestigious international events should boost consumer and investor confidence and bolster the economy, which has shown clear signs of improvement. Some analysts are calling the Olympic bid victory the “fourth arrow” of Abenomics, joining the other three arrows of Prime Minister Abe’s economic platform – monetary easing, fiscal stimulus and reforms. Whether the Tokyo Olympics turns a profit is hard to gauge at this point in time, but the event will certainly be a boom for construction, with the Olympic Village alone expected to cost around 95 billion yen.

The US ended last week on a disappointing note, as the all-important Non-Farm Payrolls came in at 169 thousand, missing the estimate of 178 thousand. The Unemployment Rate dropped from 7.4% to 7.3%, but this improvement is not all that significant, given the low participation rate in the labor force. The Fed continues to keep its cards away from prying market eyes, but we’re unlikely to see QE tapering without stronger employment numbers. Chicago Fed President Charles Evans hinted that we could see some action on this front from the Fed before the end of the year.

USD/JPY for Monday, September 9, 2013

USD/JPY September 9 at 10:55 GMT

USD/JPY 99.47 H: 100.05 L: 99.33

USD/JPY Technical

• USD/JPY is showing some movement in Monday trading. The pair touched a high of 100.05  in the Asian session but was unable to consolidate at these levels.
• On the downside, the pair is testing support at 99.45. This is followed by strong support at 98.43.
• USD/JPY is facing resistance at the round number of 100. Next, 100.85 is a stronger line of resistance.
• Current range: 99.45 to 100

Further levels in both directions:

• Below: 99.45, 98.43, 97.83, 97.18, 96.20 and 95.60
• Above: 100.00, 100.85, 101.66 and 102.53

OANDA’s Open Positions Ratio

USD/JPY ratio continues to have a strong majority of long positions, indicative of strong trader bias towards the dollar moving to higher ground.

USD/JPY continues to trade in the mid-99 range, within striking distance of the critical 100 line. Will the pair continue to move upwards? There are no major releases out of the US on Monday, but Japan releases BOJ Monetary Policy Meeting Minutes and Tertiary Industry Activity late on Monday and these releases could affect the movement of USD/JPY.

USD/JPY Fundamentals

• 5:00 Japanese Consumer Confidence. Estimate 44.3 points. Actual 43.0 points.
• 6:00 Japanese Economy Watchers Sentiment. Estimate 53.8 points. Actual 51.2 points.
• 19:00 US Consumer Credit. Estimate 12.7B.
• 23:50 BOJ Monetary Policy Meeting Minutes.
• 23:50 Japanese Tertiary Industry Activity. Estimate -0.4%.
• 23:50 Japanese M2 Money Stock. Estimate 3.8%.

*Key releases are highlighted in bold

*All release times are GMT

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