The JPY has been the weakest currency by far in recent months, as the Bank of Japan (BOJ) is keeping the monetary policy on hold, while the FED and other major central banks have been raising interest rates at an enormous pace. As a result, USD/JPY has been surging higher and it continues to remain really bullish despite the intervention by the BOJ.

The intervention last month sent this pair more than 5 cents lower, but buyers came back again and sent the price up to 148.90, which was the high print today according to my forex broker’s platform. Today the USD has been weak and we have seen it give ground against all major currencies, but it has still been progressing against the JPY. So, we decided to open a buy forex signal here after a small retreat lower.

The 200 SMA (purple) has been doing a good job as support on the 5-minute chart, so we bought USD/JPY against this moving average as shown on the chart above. The US Empire FED manufacturing index missed expectations falling deeper into negative territory, but this pair remains supported nonetheless.

US October Empire Fed Manufacturing Survey

• October Empire Fed manufacturing -9.10 points vs -4.00 expected
• September manufacturing was -1.5 points

Details:

• New orders +3.7 points vs. +3.7 last month
• Employment +7.7 points vs. +9.7 last month
• Prices paid +48.6 points vs. +39.6 last month
• Average workweek +3.3 points vs. -0.1 last month
• Prices received +22.9 points vs. +23.6 last month
• Shipments -0.3 points vs. +19.6 last month
• Unfilled order -3.7 points vs. -7.5 last month
• Delivery time -0.9 points vs. +1.9 last month
• Inventories +4.6 points vs. +9.4 last month

This uptick is certainly unwelcome but could simply reflect the bounce in oil prices. Prices received continued to decelerate.

Forward-looking 6 with ahead:

• General business conditions -1.8 vs. +8.2 last month
• New orders +2.4 points vs. +10.7 last month
• Shipments +5.6 points vs. +20.1 last month
• Unfilled orders -18.3 points vs. -23.6 last month
• Prices paid +48.6 points vs. +47.2 last month
• Prices received +36.7 points vs. +39.6 last month
• Number of employees +17.8 points vs. +18.1 last month
• Average workweek -8.3 points vs. -7.5 last month
• Capital expenditures +22.0 points vs. +17.9 last month
• Technology spending +11.0 points vs. +13.2 last month

There are some clear signs of a slowdown here, aside from capex but inflation isn’t decreasing as fast as the Fed would like.

USD/JPY Live Chart