USD/JPY – Little Movement After Strong US Consumer Confidence

The Japanese yen continues to have a quiet week, as USD/JPY trades just shy of the 102 line late in Wednesday’s European session. On the release front, Bank of Japan Governor Haruhiko Kuroda spoke at an event in Tokyo. Later in the day, we’ll get a look at Retail Sales, the primary gauge of consumer spending. The markets are bracing for a strong decline in April. It’s a quiet day in the US, with no releases on Wednesday.

The US consumer continues to be optimistic, which is good news for the US recovery. On Tuesday, CB Consumer Confidence continued to look strong as the key indicator improved to 83.0 points in April, which was within  expectations. This was the third straight reading above the 80-point level. Meanwhile, the Standard & Poor’s/Case-Shiller house price index posted a strong gain of 12.4%, surpassing the estimate of 11.9%. The markets are keeping a close eye on Thursday’s events, with the release of Preliminary GDP and the all-important Unemployment Claims.

Inflation indicators continue to point upwards in Japan, and the markets had expected a huge surge from Corporate Services Price Index in April, with an estimate of 3.3%. The index delivered the goods, posting a surge of 3.4%. Meanwhile, the BOJ minutes pointed to some dissension on Monday, as policymakers were not in agreement as to growth and inflation forecasts. There was also a suggestion set a timeframe for monetary easing, but this was rejected by the majority. The BOJ has been purchasing 60-70 trillion yen/year in asset purchases, and this aggressive monetary stance has raised inflation and growth levels, but has severely hurt the yen, which continues to trade at high levels.

USD/JPY for Wednesday, May 28, 2014

USD/JPY May 28 at 12:00 GMT

USD/JPY 101.95 H: 102.03 L: 101.80

USD/JPY Technical

• On the upside, 102.53 continues to provide resistance. 103.07 is stronger.
• 101.19 is providing support. The key level of 100.00 is stronger.
• Current range: 101.19 to 102.53

Further levels in both directions:

• Below: 101.19, 100.00, 99.57 and 98.97.
• Above: 102.53, 103.07, 104.17 and 105.70.

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in long positions in Wednesday trading, reversing directions from a day earlier. This is not consistent with what we are seeing from the pair, as the yen continues to show little movement. The ratio is made up of a majority of long positions, indicating trader bias towards the dollar breaking out and moving upwards.

USD/JPY continues to trade close to the 102 line on Wednesday. The pair has edged upwards in the European session.

USD/JPY Fundamentals

• 00:00 Bank of Japan Governor Haruhiko Kuroda Speaks.
• 23:50 Japanese Retail Sales. Estimate -3.2%.

*Key releases are highlighted in bold

*All release times are GMT

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