USD/JPY – Japanese yen loses slips as U.S. inflation. jobless claims beats expectations

After three losing sessions, USD/JPY has reversed directions and moved upwards. In Thursday’s North American session, the pair is trading at 111.41, up 0.36% on the day. There are no Japanese events for the rest of the week. In the U.S., inflation numbers were stronger than expected. PPI climbed 0.6%, above the estimate of 0.3%. Core PPI improved to 0.3%, edging above the forecast of 0.2%. Unemployment claims sparkled, dropping to 196 thousand, well below the estimate of 210 thousand. On Friday, the U.S. posts UoM consumer sentiment and the semi-annual Treasury currency report.

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The Federal Reserve was on center stage on Wednesday, with the release of the minutes from the March meeting. The Fed left the door open to rate hikes in 2019, provided that economic conditions improved. Some members said that they expected the economy to improve, while others said that rate movement could shift “in either direction based on incoming data and other developments”. The markets have priced in no rate hikes in 2019, and if the Fed continues to leave the door open to higher rates this year, the greenback could move higher.

The International Monetary Fund has downgraded its economic forecasts, lowering its estimate for the Japanese economy. The January forecast of 1.1% has been lowered to 1.0%. The IMF said that the downgrade was due to weaker Japanese exports, a result of the global trade war. The IMF also lowered its forecast for global growth, from 3.5% in January to 3.3%. Earlier in the week, a BoJ forecast downgraded its assessment for three of the country’s nine regions. Nonetheless, BoJ Governor Haruhiko Kuroda remained optimistic, saying that stronger domestic demand will offset the decline in exports, which would enable the economy to grow at a moderate pace.

Markets continue to kick the can down the road

Thursday (April 11)

  • 8:30 US PPI. Estimate 0.3%. Actual 0.6%

  • 8:30 US Core PPI. Estimate 0.2%. Actual 0.3%

  • 8:30 US Unemployment Claims. Estimate 210K. Actual 196K
  • 9:30 US FOMC Member Clarida Speaks
  • 9:35 US FOMC Member Williams Speaks
  • 9:40 US FOMC Member Bullard Speaks
  • 10:30 US Natural Gas Storage. Estimate 32B
  • 13:01 US 30-year Bond Auction.
  • 16:00 US FOMC Member Bowman Speaks

Friday (April 12)

  • 10:00 US UoM Consumer Sentiment. Estimate 98.1
  • Tentative – US Treasury Currency Report

*All release times are DST

*Key events are in bold

USD/JPY for Thursday, April 11, 2019

USD/JPY April 11 at 10:35 DST

Open: 111.02 High: 111.43 Low: 110.91 Close: 111.41

USD/JPY Technical

S3 S2 S1 R1 R2 R3
109.37 110.28 110.90 112.16 112.93 113.70

USD/JPY posted slight small gains in the Asian and European sessions. The pair continues to move higher in North American trade.

  • 110.90 is providing support
  • 112.16 is the next resistance line
  • Current range: 110.90 to 112.16

Further levels in both directions:

  • Below: 110.90, 110.28, 109.37 and 108.11
  • Above: 112.16, 112.93 and 113.70

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