USD/JPY – Japanese yen improves on strong current account surplus

By Kenny Fisher, Currency Analyst at Market Pulse

USD/JPY has lost ground in the Monday session. In the North American session, the pair is trading at 111.37, down 0.31% on the day. Japan’s current account surplus surged to JPY 1.96 trillion, up from JPY 1.83 trillion a month earlier. However, consumer confidence continues to decline, falling to 40.5 in March. This marked a sixth straight drop, as consumers remain very pessimistic about the economic outlook. In the U.S., factory orders declined 0.5%, matching the forecast. On Tuesday, the U.S. releases JOLTS Jobs Openings and Japan posts core machinery orders and PPI.

Weak global demand has taken a toll of Japanese exports and manufacturing output. This was reflected in a Bank of Japan forecast on Monday, which downgraded its assessment for three of the country’s nine regions. All three regions are dependent on electronic exports to China, which has been gripped by an economic slowdown in recent months. Despite the pessimistic report, BoJ Governor Haruhiko Kuroda remained optimistic, saying that stronger domestic demand would offset the decline in exports, which would enable the economy to grow at a moderate pace. Kuroda also said that he was confident that inflation would gradually accelerate towards the BoJ’s target of 2 percent.

Sunday (April 7)

  • 19:30 Japanese Current Account. Estimate 1.96T. Actual 1.96T

Monday (April 8)

  • 1:00 Japanese Consumer Confidence. Estimate 41.5. Actual 40.5
  • 2:00 Japanese Economy Watchers Sentiment. Estimate 47.6. Actual 44.8
  • 10:00 US Factory Orders. Estimate -0.5%. Actual -0.5%

Tuesday (April 9)

  • 10:00 US JOLTS Job Openings. Estimate 7.54M
  • 19:50 Japanese Core Machinery Orders. Estimate 3.0%
  • 19:50 Japanese PPI. Estimate 1.0%

*All release times are DST

*Key events are in bold

USD/JPY for Monday, April 8, 2019

USD/JPY April 8 at 10:50 DST

Open: 111.72 High: 111.76 Low: 111.28 Close: 111.37

USD/JPY Technical

S3S2S1R1R2R3
109.37110.28110.90112.16112.93113.70

USD/JPY posted losses in the Asian session. The pair was flat in European trade and has showed little movement in the North American session

  • 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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