USD/JPY – Japanese yen at 8-week low, U.S consumer confidence next

USD/JPY is showing little movement in the Tuesday session. In North American trade, the pair is trading at 112.86, up 0.05% on the day. In economic news, the BoJ released the minutes of its monetary policy meeting and Japanese SPPI improved to 1.3%, above the estimate of 1.1%. In the U.S, today’s key indicator is CB Consumer Confidence, which is expected to climb to 132.2 points. On Wednesday, the spotlight will be on the Federal Reserve, which is likely to raise interest rates at a range between 2.00% and 2.25%.

The BoJ released the minutes of last week’s policy meeting. The BoJ is showing no signs of altering its ultra-accommodative policy. but the minutes indicated that some policymakers are concerned about the impact of the policy on the banking system. With inflation still below the Bank’s target of around 2 percent, the BoJ is unlikely to take anything more than tweak current policy. At the policy meeting, the Bank held its short-term interest rate target at -0.1 percent and a pledge to guide 10-year government bond yields around zero percent. The BoJ also maintained a pledge to keep interest rates extremely low for an extended period.

The U.S and China fired more trade salvos at each other this week, and that could spell bad news for the Japanese yen. On Monday, the U.S imposed tariffs on some $200 billion worth of Chinese goods, while China responded with tariffs of $60 billion on U.S products. There may be more headwinds ahead, as China sharply attacked the U.S, saying it had plunged “a knife to China’s neck” with the new tariffs. The Chinese have canceled trade talks with the Trump administration, and no new talks are likely to be held until the mood improves between the world’s two largest economies. Previous rounds of tariffs between the two economic giants have boosted the U.S dollar, but so far, investors have reacted calmly and have not snapped up the U.S dollar at the expense of other currencies.

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USD/JPY Fundamentals

Monday (September 24)

• 19:50 Japanese Monetary Policy Meeting Minutes
• 19:50 Japanese SPPI. Estimate 1.1%. Actual 1.3%

Tuesday (September 25)

• 1:35 BoJ Governor Kuroda Speaks
• 9:00 US HPI. Estimate 0.2%. Actual 0.2%
• 9:00 US S&P/CS Composite-20 HPI. Estimate 6.2%. Actual 5.9% 
• 10:00 US Consumer Confidence. Estimate 132.2
• 10:00 US Richmond Manufacturing Index. Estimate 22

Wednesday (September 26)

• 1:00 BoJ Core CPI. Estimate 0.6%
• 10:00 US New Home Sales. Estimate 630K
• 10:30 US Crude Oil Inventories
• 14:00 US FOMC Economic Projections
• 14:00 US FOMC Statement
• 14:00 US Federal Funds Rate. Estimate <2.25%
• 14:30 FOMC Press Conference

*All release times are DST

*Key events are in bold

USD/JPY for Tuesday, September 25, 2018

USD/JPY September 25 at 9:35 DST

Open: 112.80 High: 112.98 Low: 112.74 Close: 112.86

USD/JPY Technical

In the Asian session, USD/JPY posted small gains but then retracted. This trend was repeated in European trade. The pair is steady in North American trade

• 112.30 is providing support
• 113.75 is the next resistance line

Further levels in both directions:

• Below: 112.30, 111.22, 110.21 and 109.21
• Above: 113.75, 114.73 and 115.51
• Current range: 112.30 to 113.75

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