FOREX Watch: USD/JPY pushes through psychological barrier
The USDJPY pushed through the psychological 100 level Tuesday for the first time since late-July. The pair advanced on underwhelming Japanese data, led by revised second quarter GDP figures. Earlier in the week it was reported Japan’s economy grew 0.9 percent in the second quarter, slightly below expectations.
On Monday Japan’s Eco Watchers Survey, which monitors regional economic trends, fell to 51.2 in August after recording 53.6 the previous month. The US dollar advanced modestly Monday before soaring past the 100 mark as the global economy exited risk mode. At the end of the New York session, the pair was trading at 100.3, a gain of more than 0.6 percent.
The yen’s relative decline comes even after central bank policymakers expressed confidence that monetary stimulus would help boost the economy. The minutes from the Bank of Japan’s recent policy meetings, which were released Tuesday, expressed general optimism about economic growth. BoJ policymakers cited the rise in wages and household incomes as positive steps toward increased consumer spending. Earlier in the year the Bank of Japan initiated an unprecedented stimulus program, promising to inject more than $1.4 trillion into the economy in less than two years.
Over the previous five days the US dollar has advanced three-quarters of a percent against the yen. Year-to-date, the USDJPY remains one of the most profitable trades, yielding gains in the vicinity of 15.5 percent.
The technical indicators show a slightly bearish trade over the short-term, with supports situated at 99.05 and 98.80. On the upside, the pair pushed through two intraday resistance levels, leaving 100.36, the high from July 25, exposed. Over the long-term, monetary stimulus will likely debase the yen in favour of the dollar. A recent article from Finances.com showed higher yen volumes were the main catalyst behind the spike in daily FOREX trading, which is now valued at $5.3 trillion a day.
Sorry. No data so far.