USD/JPY – Japanese yen unchanged in thin holiday trade

The Japanese yen is showing little movement in the Monday session. In North American trade, the pair is trading at 111.14, up 0.04% on the day. In economic news, Japanese Capital Spending jumped 12.8% in the second quarter, crushing the estimate of 6.6%. This marked the strongest reading since 2007. Final Manufacturing PMI edged up to 52.5 points, matching the forecast. On Tuesday, the U.S releases ISM Manufacturing PMI.

There was some good news from Japan’s inflation front on Thursday, as Tokyo Core CPI strengthened for a third straight month, with a gain of 0.9%. This indicator is considered the primary gauge of consumer inflation, and the strong reading propelled the yen higher on Thursday. Still, inflation remains well below the Bank of Japan’s target of just below 2%, despite the Bank’s ultra-accommodative monetary policy.

Investors are keeping a nervous eye on the tariff spat between China and the U.S. So far, the two economic giants have imposed $50 billion in tariffs on each other, and President Trump has threatened further tariffs worth some $200 billion, which could be imposed as early as this week. The U.S could elect to impose the tariffs in smaller bites, such as a $50 billion tariff. With the U.S economy booming, there is little pressure on the Trump administration to shy away from imposing further tariffs. The current trade spat has already seen the U.S dollar gain ground against rivals such as the euro, and further tariffs could boost the U.S dollar.

A jittery start to the month of September

When central banks and the political worlds collide

Barnier and UK manufacturing data weigh on GBP

USD/JPY Fundamentals

Sunday (September 2)

• 19:50 Japanese Capital Spending. Estimate 6.6%. Actual 12.8%
• 20:30 Japanese Final Manufacturing PMI. Estimate 52.5. Actual 52.5

Monday (September 3)

• 1:40 BoJ Governor Haruhiko Kuroda Speaks
• 19:50 Japanese Monetary Base. Estimate 6.3%

Tuesday (September 4)

• 10:00 US ISM Manufacturing PMI. Estimate 57.6

*All release times are DST

*Key events are in bold

USD/JPY for Monday, September 3, 2018

USD/JPY September 3 at 10:15 DST

Open: 111.11 High: 111.19 Low: 110.85 Close: 111.14

USD/JPY Technical

USD/JPY ticked lower in the Asian session but recovered in European trade. The pair is flat in the North American session

• 110.21 is providing support
• 111.22 remains under pressure in the resistance

Further levels in both directions:

• Below: 110.21, 109.21 and 108.11
• Above: 111.22, 112.30, 113.75 and 114.73
• Current range: 110.21 to 111.22

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