USD/JPY – Dollar Edges up to 116 Yen, Trump Press Conference Next

USD/JPY has posted slight gains in the Wednesday session. In North American trade, the pair is trading at 116.20. On the release front, Japan’s current surplus is expected to narrow to JPY 1.48 trillion. There are no major US events on the schedule. On Thursday, the US releases unemployment claims, with the indicator expected to rise to 266 thousand.

With only a handful of events on the Wednesday schedule, the markets will be keeping a close eye on the Trump show later in the day. Trump will host a press conference out of the Trump Towers in New York City. Trump hasn’t spoken formally with the press in six months, choosing instead to send pithy comments on his Twitter account. The president-elect had plenty to say about the ills of the US economy on the campaign trail, but was short on specifics. He has gone on record promising tax cuts and significant fiscal spending to repair the country’s infrastructure. Trump has said he will implement protectionist policies, which has lessened investors’ appetite for risk. The markets will be hoping for more specifics about economic policy, with just over a week until Inauguration Day. The US dollar has climbed sharply since mid-November, as the US economy sails full steam ahead in 2017.

Japanese consumers remain pessimistic about the economy, but there was a silver lining from the latest Consumer Confidence indicator, which rose to 43.1 points in December. This figure beat expectations and marked the indicator’s highest level since September 2013. Will the economy improve in 2017? There are some positive signs as we enter 2017. A weaker Japanese yen has boosted exports, and the Bank of Japan has given the economy a cautious thumbs-up, raising its growth projections. If improving consumer confidence translates into stronger consumer spending, we could see improved readings from key Japanese indicators.

The US released key employment numbers on Friday and USD/JPY responded with sharp gains. Wages rebounded in December, as Average Hourly Earnings climbed 0.4%, edging above the estimate of 0.3%. This marked a strong turnaround after the November reading of -0.1%. The news was less positive from Nonfarm Payrolls, which dropped to 156 thousand, well off the estimate of 175 thousand. This marked a 3-month low, but the dollar still posted gains.

USD/JPY Fundamentals

Wednesday (January 11)

• 00:00 Japanese Leading Indicators. Estimate 102.6%. Actual 102.7%
• 10:30 US Crude Oil Inventories. Estimate 0.9M
• 11:00 President-Elect Trump Speech
• 13:01 US 10-year Bond Auction
• 13:20 US FOMC Member William Dudley Speech
• 18:50 Japanese Bank Lending. Estimate 2.4%
• 18:50 Japanese Current Account. Estimate 1.48T

Thursday (January 12)

• 8:30 US Unemployment Claims. Estimate 266K

*All release times are GMT

*Key events are in bold

USD/JPY for Wednesday, January 11, 2017

USD/JPY January 11 at 7:00 EST

Open: 115.87 High: 116.46 Low: 115.66 Close: 116.25

USD/JPY Technical

• USD/JPY showed little movement in the Asian session and has posted slight gains in European trade
• 115.88 remains fluid. Currently, it is providing weak support
• 116.88 is the next resistance line
• Current range: 115.88 to 116.88

Further levels in both directions:

• Below: 115.88, 114.83, 113.80 and 112.57
•  Above: 116.88, 118.05 and 118.85

OANDA’s Open Positions Ratio

USD/JPY ratio is unchanged in the Wednesday session. Currently, short positions have a small majority (51%), indicative of a lack of trader bias towards what direction USD/JPY will take next.

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.