USD/JPY – Yen Starts Off Week Quietly

The Japanese yen is almost unchanged on Monday. Early in the North American session, USD/JPY is trading just shy of the 118 line. On the release front, Japanese Final Manufacturing PMI remained steady at 52.2 points. Later in the day, Japan will release Monetary Base. In the US, today’s highlight is ISM Manufacturing PMI. The markets are expecting the index to soften in the January report.

US Advance GDP for Q4 disappointed, posting a gain of 2.6%. The markets had anticipated a gain of 3.0%. Still, market sentiment towards the US economy remains positive, underscored by the Federal Reserve statement last week, where the Fed noted solid growth in the economy. The Fed remains on track to raise rates later in 2015, and the dollar will likely benefit as speculation continues over the timing of a rate hike.

Japanese releases were weak on Thursday. Tokyo Core CPI slipped for a sixth straight month, dropping to 2.2%. This matched the forecast. Household Spending continued to lose ground, posting a sharp decline of 3.4%. The markets had expected a decline of 2.3%. On the manufacturing front, Preliminary Industrial Production improved to 1.0%, but this was shy of the estimate of 1.3%.

USD/JPY for Monday, February 2, 2015

USD/JPY February 2 at 13:45 GMT

USD/JPY 117.19 H: 117.87 L: 117.59

USD/JPY Technical

• USD/JPY posted gains in the Asian session, testing resistance at 117.49. The pair is unchanged in European trade.
• 117.49 remains under pressure as a resistance line. 118.69 is stronger.
• 116.69 is an immediate support line.
• Current range: 116.69 to 117.49

Further levels in both directions:

• Below: 116.69, 115.56, 113.64 and 112.41
• Above: 117.49, 118.69, 119.83, 120.63 and 121.69

OANDA’s Open Positions Ratio

USD/JPY ratio currently has a majority of long positions, indicative of trader bias towards the US dollar moving to higher ground.

USD/JPY Fundamentals

• 1:35 Japanese Final Manufacturing PMI. Estimate 52.1 points. Actual 52.2 points.
• 13:30 US Core PCE Price Index. Estimate 0.0%.
• 13:30 US Personal Spending. Estimate -0.1%.
• 13:30 US Personal Income. Estimate 0.2%.
• 14:45 US Final Manufacturing PMI. Estimate 54.1 points.
• 15:00 US ISM Manufacturing PMI. Estimate 54.9 points.
• 15:00 US Construction Spending. Estimate 0.9%.
• 15:00 US ISM Manufacturing Prices. Estimate 40.1 points
• 23:50 Japanese Monetary Base. Estimate 40.1%.

*Key releases are highlighted in bold

*All release times are GMT

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