USD/JPY – Yen Loses Ground on Weak Manufacturing Data

The US dollar has rebounded on Tuesday as USD/JPY trades above the 119 line early in the North American session. In Japan, Tertiary Industry Activity was unexpectedly weak on Monday, posting a decline of 0.3%. This was well below the estimate of 0.1%. In the US, today’s highlight is JOLTS Job Openings. There are no Japanese events on Tuesday.

Japanese manufacturing data was a disappointment, as Tertiary Industry Activity came in at -0.3%, well below the forecast of 0.1%. M2 Money Stock posted a gain of 3.4%, shy of the estimate of 3.6%. Earlier in the week, Current Account improved to JPY 0.98 trillion, beating the forecast of JPY 0.95 trillion. Consumer Confidence and Economy Watchers Sentiment both were up slightly in the January report.

US releases ended the week with a superb US Nonfarm Payrolls report for January. The key employment indicator improved to 257 thousand in January, up from 252 thousand a month earlier. This easily beat the estimate of 236 thousand. The Federal Reserve has been clear that the employment numbers will have to be strong before a rate hike kicks in, so the strong NFP reading has reinforced expectations for an interest rate in mid-2015, which would be a boost for the US dollar. We’ll get a look at additional US employment data later on Tuesday, with the release of JOLTS Job Openings. The markets are expecting the indicator’s recent upward trend to continue, with an estimate of 5.05 million.

USD/JPY for Tuesday, February 10, 2015

USD/JPY February 10 at 13:55 GMT

USD/JPY 119.10 H: 119.58 L: 118.40

USD/JPY Technical

• USD/JPY showed little movement in the Asian session. The pair has posted gains in the European and North American sessions.
• 118.69 is providing weak support. 117.49 is stronger.
• 119.83 is an immediate resistance line.
• Current range: 118.69 to 119.83

Further levels in both directions:

• Below: 118.69, 117.49, 116.69, 115.56 and 113.64
• Above: 119.83, 120.63, 121.69 and 122.19

OANDA’s Open Positions Ratio

USD/JPY ratio is showing gains in long positions on Tuesday, reversing the direction seen a day earlier. This is consistent with the pair’s movement, as the yen has posted losses. The ratio has a majority of long positions, indicative of trader bias towards the US dollar moving to higher ground.

USD/JPY Fundamentals

• 13:20 US FOMC Member Jeffrey Lacker Speaks.
• 14:00 US NFIB Small Business Index. Estimate 101.3 points. Actual 97.9 points.
• 15:00 US JOLTS Openings. Estimate 5.03M.
• 15:00 US IBD/TIPP Economic Optimism. Estimate 51.4 points.
• 15:00 US Wholesale Inventories. Estimate 0.2%.

*Key releases are highlighted in bold

*All release times are GMT

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