USD/JPY – Japanese yen higher, Japan inflation data next

The Japanese yen has posted gains in the Thursday session. In the North American trade, USD/JPY is trading at 110.01, down 0.31% on the day. On the release front, key U.S indicators were mixed. The Philly Fed Manufacturing Index slid to 19.9 points, its lowest level since August. There was better news on the employment front, as unemployment claims remained unchanged at 218 thousand, beating the estimate of 220 thousand. In Japan, National Core CPI is expected to remain at 0.7%, and PMI Flash Manufacturing is forecast to tick up to 52.6 points. On Friday, OPEC members meet in Vienna.

The Bank of Japan plans to hold the course on monetary policy, according to the minutes of the BoJ’s April policy meeting. At the meeting, policymakers maintained interest rates at -0.10%. As well, the bank also dropped the timeframe for achieving its inflation target of 2 percent, a signal that the bank has no plans to increase stimulus. The minutes indicated that most members wanted to maintain current monetary policy, holding rates at -0.10% and the 10-year bond yield around zero percent. BoJ policymakers appear resigned to the fact that the inflation target will not be reached anytime soon, but the BoJ nevertheless is sticking to its 2 percent target.

The escalating trade spat between the U.S and its trading partners has shaken up the markets, as unnerved investors monitor developments. The Japanese yen is traditionally a safe-haven asset in times of trouble, the currency has recorded limited gains against the U.S dollar. Although President Trump has not imposed import tariffs on Japan, the Japanese economy depends heavily on exports, and a rash of tariffs would take a toll on growth. In the latest salvo in the trade war rhetoric, Trump has threatened China with a 10 percent tariff on some $200 billion in Chinese goods.

  (Update 1) Onwards and Upwards

  Oil falls -2% as OPEC nears deal to raise production

USD/JPY Fundamentals

Thursday (June 21)

• 8:30 US Philly Fed Manufacturing Index. Estimate 28.3. Actual 19.9
• 8:30 US Unemployment Claims. Estimate 220K. Actual 218K
• 9:00 US HPI. Estimate 0.3%. Estimate 0.1%
• 10:00 US CB Leading Index. Estimate 0.4%
• 10:30 US Natural Gas Storage. Estimate 85B
• Tentative – US Bank Stress Test Results
• 19:30 Japanese National Core CPI. Estimate 0.7%
• 20:30 Japanese Flash Manufacturing PMI. Estimate 52.6

Friday (June 22)

• All Day – OPEC Meetings

*All release times are DST

*Key events are in bold

USD/JPY for Thursday, June 21, 2018

USD/JPY June 21 at 10:35 DST

Open: 110.36 High: 110.76 Low: 109.94 Close: 110.02

USD/JPY Technical

USD/JPY edged higher in the Asian session. In European trade, the pair reversed directions and moved downwards. USD/JPY has edged lower in North American trade

• 109.21 is providing support
• 110.21 has switched to resistance following losses by USD/JPY on Thursday. It is a weak line

Further levels in both directions:

• Below: 109.21, 108.13 and 107.01
• Above: 110.21, 111.22, 112.30 and 113.75
• Current range: 109.21 to 110.21

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