USD/JPY – Yen Steady as US GDP Meets Expectations

The Japanese yen has ticked lower in the Thursday session. In North American trade, USD/JPY is trading at 111.40. On the release front, US Final GDP posted a gain of 2.1%, edging above the estimate of 2.0%. Unemployment claims jumped to 258 thousand, above the forecast of 244 thousand. Later in the day, Japan releases Household Spending and Tokyo Core CPI. The markets are braced for declines from both indicators. On Friday, the US releases UoM Consumer Sentiment, which is expected to improve to 97.8 points.

The markets are likely to be treated to “more of the same” from the Bank of Japan as far as monetary policy. Earlier in the week, the BoJ released a summary of the minutes of its policy meeting from March 16. There were no surprises, as policymakers said the BoJ’s ultra-easy monetary stance would continue as long as inflation remains well below the target of 2 percent. Japan’s economy has improved in recent months, boosted by a stronger manufacturing sector and an increase in exports. At the same time, domestic demand remains soft, which has resulted in weak inflation levels. Japan will release key consumer spending and inflation numbers on Thursday, and soft readings could hurt the Japanese yen.

It’s been a rough start for the Trump administration, which has been beset by controversy and crises. Trump, who has been in office for more than two months, has yet to provide any details of an economic policy, to the consternation of the markets. Last week, Trump’s proposed healthcare bill was dead on arrival before even being voted on, a humiliating defeat for the president. This setback has made the markets even more jittery about Trump, and the inquiry into the Trump administration’s links with Russia is gathering steam, which is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but the White House will need to improve coordination with Republican lawmakers to ensure that his next attempt to pass legislation is not a repeat of the healthcare debacle.

USD/JPY Fundamentals

Thursday (March 30)

• 8:30 US Final GDP. Estimate 2.0%. Actual 2.1%
• 8:30 US Unemployment Claims. Estimate 244K. Actual 258K
• 8:30 US Final GDP Price Index. Estimate 2.0%. Actual 2.1%
• 10:30 US Natural Gas Storage. Estimate -37B
• 11:00 US FOMC Member Robert Kaplan Speech
• 19:30 Japanese Household Spending. Estimate -1.6%
• 19:30 Japanese National Core. Estimate 0.2%
• 19:30 Japanese Tokyo Core CPI. Estimate -0.2%
• 19:30 Japanese Unemployment Rate. Estimate 3.0%
• 19:50 Japanese Preliminary Industrial Production. Estimate 1.3%

Upcoming Key Events

Friday (March 31)

• 10:00 US Revised UoM Consumer Sentiment. Estimate 97.8

*All release times are GMT

*Key events are in bold

USD/JPY for Thursday, March 30, 2017

USD/JPY March 28 at 8:50 EST

Open: 111.15 High: 111.42 Low: 110.92 Close: 111.38

USD/JPY Technical

USD/JPY showed limited movement in the Asian session and has posted slight gains in European trade. The pair continues to edge higher in North American trade

• 110.94 remains fluid. Currently it is a weak support line
• 112.57 is the next resistance line
• Current range: 110.94 to 112.57

Further levels in both directions:

• Below: 110.94, 109.77, 108.54 and 107.49
•  Above: 112.57, 113.80 and 114.83

OANDA’s Open Positions Ratio

USD/JPY ratio is showing little movement in the Thursday session. Currently, long positions have a majority (65%), indicative of trader bias towards USD/JPY continuing to move upwards.

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.