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USD/JPY Consolidates Ahead of Active Data Wire

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USD/JPY Consolidates Ahead of Active Data Wire

The US dollar was relatively unchanged, as market participants across the western world celebrated Christmas day. The USDJPY approached a five-year high in the prior session, as investors increased their bullish bets on the US dollar ahead of an active second-half of the week.

The US dollar index ticked in at 80.50. Over the past five sessions the greenback has advanced more than half a percent against a basket of its major competitors.

The USDJPY was relatively unchanged after Bank of Japan Governor Haruhiko Kuroda said Japan has a “golden opportunity” to beat deflation. In a speech to around 300 business leaders and executives in Tokyo, Kuroda explained the “deflation equilibrium” that has plagued the Japanese economy for years. Kuroda was confident recent economic developments would help bring inflation toward the 2 percent target, but reaffirmed the central bank wasn’t trying to boost inflation artificially.

Japan’s Statistics Bureau will report on consumer inflation in the second-half of the week. The National Consumer Price Index advanced 1.1 percent annually in October. The November estimate will provide market participants with another tool to assess the impact of the central bank’s monetary easing strategy. In April the BOJ announced it would inject $1.8 trillion into the Japanese economy in less than two years to combat deflation.

The Japanese government will also report on overall household spending, unemployment and retail sales.

In the United States, jobs data are expected to show unemployment benefits fell by 24,000 in the week ending December 20. Job creation has picked up in the fourth quarter, as private sector employers added more than 400,000 jobs in October and November. As the unemployment rate fell to 7 percent, the Federal Reserve announced it would pare asset purchases by $10 billion, beginning in January. The Fed has eased around $4 trillion into the financial markets since November 2008.

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