The USD/JPY is sliding lower and targeting key support

A big morning of economic data out of Japan looks set to shape Asian trade on Friday and as a result it looks like there is a good chance that we are going to test a signifcant support level in the USD/JPY.

The two keys that traders wanted to know, where the inflation figures and how unemployment was looking.

Key Numbers

• Headline inflation came in as expected at 0.4%.

• The unemployment rate had a big improvement coming in at 2.8% compared to a predicted 3.0%.

Some other information released from the recent BOJ meeting show that they expect it to take longer to reach their inflation target of 2% than previously thought.

Yen's Reaction

The USD/JPY has continued to sell off since the data release, continuing the bearish trend that has been developing from the key US session.

The next key downside level to watch is 111.00, which should provide support and a potential bounce.

Watch the trend that has developed for opportunites to get short.

Nikkei 225

The Nikkei 225 has reacted only marginally and has opened slightly lower. The improved unemployment rate was a significant win for Japan.

The index futures continue to trade in a range between 19910 to 20300.