USD/JPY – Steady As Japanese Data Sparkles

The Japanese yen is steady on Thursday, as the pair trades close to the 102 in the North American session. In economic news, US Unemployment Claims plummeted to their lowest levels in seven years. Core CPI posted a weak gain and we’ll get a look at the Philly Fed Manufacturing Index later in the day. In Japan, Preliminary GDP shot higher and Tertiary Industry Activity and Consumer Confidence met expectations. As well, BOJ Governor Haruhiko Kuroda delivered remarks at an event in Tokyo.

US Unemployment Claims were outstanding, dropping to 297 thousand last week. This easily beat the estimate of 321 thousand and was the lowest level we’ve seen since May 2007. US Core CPI posted another weak reading, with a gain of 0.2%. This edged above the estimate of 0.1%. There was excellent news from the manufacturing front, as Empire State Manufacturing Index climbed to 19.0 points, crushing the estimate of 5.5. This was the indicator’s best showing in two years. The Philly Fed Manufacturing Index will be released later on Thursday – will it follow suit with a strong reading?

There was positive news from Japanese releases on Wednesday, as GDP and manufacturing data looked strong. Preliminary GDP jumped 1.5% in Q1, up from 0.3% in Q4 of 2013. The estimate stood at 1.0%. Meanwhile, Tertiary Industry Activity bounced back from a decline and jumped 2.4% last month. This was just shy of the estimate of 2.5%. Japanese inflation numbers have been improving, as they continue to move towards the Bank of Japan’s inflation target of 2%. The Corporate Goods Price Index had an excellent April, jumping 4.1%. This matched expectations and was the index’s best performance since October 2008.

Low inflation levels have been a persistent problem in the US, and Fed chair Yellen highlighted this issue when speaking before Congress last week. Inflation levels are nowhere near the Fed’s target of 2.0%, and weak inflation is a sign of an underperforming US economy. There was good news as PPI, a key inflation indicator, edged higher in April, coming in at 0.6%. This easily beat the estimate of 0.2%. Core PPI also beat the estimate, posting a gain of 0.5%.

USD/JPY for Thursday, May 15, 2014

USD/JPY May 15 at 13:50 GMT

USD/JPY 101.76 H: 102.11 L: 101.66

USD/JPY Technical

• USD/JPY is steady in Thursday trade.
• On the upside, 102.53 is providing strong resistance.
• 101.19 is providing support. The key line of 100.00 follows.
• 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, 105.70 and 106.85.

OANDA’s Open Positions Ratio

USD/JPY ratio is almost unchanged in Thursday trading. This is consistent with what we are seeing from the pair, which is not showing much movement. The ratio is made up of a majority of long positions, indicating trader bias towards the dollar moving upwards.

USD/JPY is steady on Thursday. In the North American session, the dollar is under pressure.

USD/JPY Fundamentals

• 4:25 BOJ Governor Haruhiko Kuroda Speaks.
• 5:00 Japanese Consumer Confidence. Estimate 37.0 points. Actual 37.0 points.
• 12:30 US Core CPI. Estimate 0.1%.
• 12:30 US Unemployment Claims. Estimate 321K.
• 12:30 US CPI. Estimate 0.3%.
• 12:30 US Empire State Manufacturing Index. Estimate 5.5 points.
• 13:00 US TIC Long-Term Purchases. Estimate 32.3B.
• 13:15 US Capacity Utilization Rate. Estimate 79.2%.
• 13:15 US Industrial Production. Estimate 0.4%.
• 14:00 US Philly Fed Manufacturing Index. Estimate 13.9 points.
• 14:00 US Mortgage Delinquencies.
• 14:00 US NAHB Housing Market Index. Estimate 49 points.
• 14:30 US Natural Gas Storage. Estimate 99B.
• 23:00 Federal Reserve Chair Janet Yellen Speaks.

*Key releases are highlighted in bold

*All release times are GMT

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.