USD/JPY – Almost Unchanged As US, Japanese Numbers Disappoint

The Japanese yen is showing little movement on Thursday, as the pair trades at the 102 line. On the release front, Japanese manufacturing numbers have been dismal this week, and that continued as Core Machinery Orders posted a sharp decline in May. In the US, key releases missed their estimates, as retail sales numbers were weak and Unemployment Claims climbed to a three-weak high. There are no Japanese releases on Thursday.

Thursday’s key US events were a major disappointment, as retail sales and employment numbers were weak. Retail Sales came in at 0.3%, short of the estimate of 0.5%. Core Retail Sales could only muster a gain of 0.1%, shy of the forecast of 0.4%. Unemployment Claims, one of the most important economic indicators, rose to 317 thousand, missing market expectations of 306 thousand. USD/JPY has not reacted to weak US numbers as the dollar remains firm, but that could change before the week is out.

Japanese manufacturing numbers have been brutal in the month of May. There was more bad news on Thursday, as Core Machinery Orders fell by 9.1%, after a very strong gain a month earlier. However, this was slightly better than the estimate of -11.5%. The Manufacturing Index and Tertiary Industry Activity also slumped, pointing to serious trouble in the Japanese manufacturing sector.  There was much better news to start off the week, as Final GDP soared 1.6% in Q1, a huge improvement from the weak gain of 0.2% in Q4. Current Account also looked sharp, posting a surplus for the first time since September. These strong numbers have reinforced the BOJ’s contention that the improving economy will be able to weather the sales tax hike which took effect in April.

USD/JPY for Thursday, June 12, 2014

USD/JPY June 12 at 13:10 GMT

USD/JPY 102.00 H: 102.14 L: 101.96

USD/JPY Technical

• USD/JPY is flat in Thursday trade.
• On the upside, 102.53 is the next resistance line. The next resistance line is 103.07, which has held firm since early April.
• 101.19 continues to provide strong support.
• Current range: 101.19 to 102.53

Further levels in both directions:

• Below: 101.19, 100.00, 99.57 and 98.97.
• Above: 102.53, 103.07, 104.17 and 105.70.

OANDA’s Open Positions Ratio

USD/JPY ratio is unchanged on Thursday. This is consistent with the lack of movement we’re seeing from the pair. The ratio continues to be made up of a majority of long positions, indicating trader bias towards the dollar breaking up and moving upwards.

USD/JPY is trading at the 102 line. The pair is unchanged in the European session.

USD/JPY Fundamentals

• 12:30 US Core Retail Sales. Estimate 0.4%. Actual 0.1%. 
• 12:30 US Retail Sales. Estimate 0.5%. Actual 0.3%.
• 12:30 US Unemployment Claims. Estimate 306K. Actual 317K.
• 12:30 US Import Prices. Estimate 0.2%. Actual 0.1%.
• 14:00 US Business Inventories. Estimate 0.4%.
• 14:30 US Natural Gas Storage. Estimate 111B.
• 17:01 US 30-year Bond Auction.

*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.