The Japanese Kicked Off the Day on the “Right Foot” - Forex News by FX Leaders

The Japanese Kicked Off the Day on the “Right Foot”

Posted Friday, October 28, 2016 by
Skerdian Meta • 2 min read

Today is a day filled with inflation reports from across the world, as well as a few prelim GDP releases. Japan started the day as usual, followed by their neighbors, the Aussies. Looking at the screen, the Japanese numbers seem all green, so they must be positive, right? Let´s have a look. 

The household spending and the Tokyo core CPI (consumer price index) year/year beat the expectations by 0.5% and 0.1%, respectively. The catch in these two data pieces was that they remained negative, although they beat the expectations. Therefore, we can say that on these two fronts, Japan is still a long way away from the beating deflation. Beating your own self in the previous months doesn´t count as positive, so the green color doesn´t count this time.

Additionally, the national CPI remained unchanged at -0.5%, while the BOJ (Bank of Japan) core CPI slipped 1 point to 0.2% from 0.3%. These are some very depressing numbers. The oil prices have picked up somewhat in the last few months and the global economic situation has improved as well. This has helped inflation pick up in many other developed economies, but not in Japan.

As I said in one of the market updates about a week ago, I don´t have the slightest clue where the BOJ Kuroda got the courage when he said that the BOJ will let inflation overshoot above 2%. I remember saying this phrase, "Get to 0.2% first, then aim for the starts". Today proved me right. 

The trend is clearly up in USD/JPY and the 20 moving average in grey is providing support.

After all they have done with the trillion Yen economic stimulus package and the negative rates, there is still nothing in sight, unlike in the Eurozone. The Japanese Yen continues to suffer among USD strengths, as my colleague Eric mentioned in his article last evening

USD/JPY continues to march higher, but that´s mainly due to risk appetite as the global economic sentiment improves. This forex pair is about 200 pips higher from the lows this week, but strong long term resistance levels are just above our head here. So let´s see if the buyers hold enough power with them to push past these resistance levels.

By the way, we are going to have a technical look at this forex pair in a while, so check it out to see the broad technical picture of USD/JPY.  

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies

About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
Related Articles
The broad-based U.S. dollar is going to end this week on the bearish track as traders continue to cheer the Joe Biden administration's inaug
16 hours ago
Comments
0 0 vote
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments