Greenback is rallying higher against Japanese Yen on the back of the positive market sentiment towards American 45th President. Meanwhile, consumer spending in Japan remained weak, despite Q3’s stronger-than-expected economic growth.
Today, (14/11), 8:30 (GMT), USDJPY trades at 107.795, its highest since June 7, up 0.19% compared to the opening price.
Fig. USDJPY D1 Technical Chart
Factors that cover on USDJPY
A report released by the Cabinet Office on Monday (14/11) suggested that Gross domestic product (GDP) expanded at an annualized 2.2% in the third quarter, faster than the 0.9% increase markets had expected, compared to 0.7% growth in the previous quarter. This marked the optimism signals for exports on the Japanese economy.
Although the report implied that exports recovered, private consumption and capital expenditure are still quite weak. Private consumption, which is appropriate 60% of GDP, rose 0.1%, unchanged from the second quarter, as partly as effects of bad environment, including typhoons and weather factors, undermined consumer spending. Meanwhile, the latest figures from Cabinet Office on Monday showed that price index in October decreased 0.1%, fell for a seventh straight month, and lower than the expectation of 0.3%.
Fig. Japan monthly Price Index
The above information means that the Japanese economy isn’t as strong as the target given because market development trend remained weak despite robust government spending and highly accommodative monetary policy.
According to a comment of Kuroda – governor of the Bank of Japan (BOJ) – that BOJ will pursue powerful monetary easing and make policy adjustments as appropriate, taking into account economic, price and financial developments, to maintain the momentum toward achieving 2% inflation target.
On the other hand, traders received the good news from the American market, especially the going up of US dollar when this currency touched a nine-month peak in Asia on Monday. The most important reason of upward trend was prospects of larger fiscal spending and higher inflation, leading to growing up of US Treasury yields to 10 – month highs at 2.18% in Asia.
Besides, the greenback has strengthened as expectations that Trump’s policy of administration would boost consumer spending, lift inflation, pushing the development of America.
The dollar index was up 0.4% to 99.428 after touching 99.445, the highest level since 1 February.
Moreover, the strong figures from the University of Michigan referred to consumer sentiment seen Americans optimistic. Reported achieving 91.6%, a higher level than the expectation of an 87.4% increase.
Fig: USDJPY D1 Technical Chart
As shown on the daily chart, USDJPY has been on a steady rise since more than 1 week. The pair reached its highest level since 7 June and is continuing to go up. Two MAs below the price action and RSI entering overbought area support the uptrend.
Similarly, as seen on H4, the indicator is about to touch a new level at 70. With the movement on MAs of price action, this gives some suggestions that uptrend of USDJPY
Fig. USDJPY H4 Technical Chart
Analyses of Group Fiinvesting
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