The USD/JPY dropped over 1% in early trading during the North American session as inflation data in the United States (US) resumed its downward trajectory in core figures. The pair trades at 156.33 at the time of writing.
The US Bureau of Labor Statistics (BLS) revealed that consumer inflation rose by 0.4% Month over Month, exceeding estimates of 0.3% for an unchanged number compared to November’s reading. Annualized, the Consumer Price Index (CPI) rose 2.9% as expected, up two ticks from the previous reading of 2.7%.
Excluding volatile items, the so-called core inflation expanded by 0.2% MoM, as expected. At the same time, in the twelve months to date, it is up 3.2%, lower than the 3.3% printed in November and projected by economists.
The Yen extended its gains as the USD/JPY slipped from around 157.00 to current spot prices. Following suit, the US 10-year Treasury note yield plunged over twelve basis points (bps) to 4.661%.
Earlier during the Asian session, Bank of Japan (BoJ) Governor Kazuo Ueda was hawkish. He stated that they will hike rates and adjust the degree of monetary support if the economy improves and price conditions continue. He emphasized that Spring wage talks are crucial and noted that BoJ’s branch managers’ meeting showed an encouraging view on pay.
Later in the day, Fed speakers Thomas Barkin, Neel Kashkari, and John Williams will cross the newswires ahead of Thursday's Retail Sales and jobless claims data. The Japanese economic docket is empty for the remainder of the week.
The uptrend remains intact, yet the USD/JPY might retreat in the short term. Once sellers pushed prices below the Tenkan-sen of 157.41, that opened the door for further losses. The next key support would be the 156.00 figure, followed by the Kijun-sen at 154.94. The next support would be the 50-day Simple Moving Average (SMA) at 154.74 if cleared.
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | -0.22% | -0.49% | -1.03% | -0.20% | -0.72% | -0.64% | -0.19% | |
EUR | 0.22% | -0.27% | -0.82% | 0.00% | -0.50% | -0.42% | 0.03% | |
GBP | 0.49% | 0.27% | -0.58% | 0.29% | -0.23% | -0.15% | 0.32% | |
JPY | 1.03% | 0.82% | 0.58% | 0.84% | 0.32% | 0.40% | 0.87% | |
CAD | 0.20% | -0.00% | -0.29% | -0.84% | -0.52% | -0.43% | 0.02% | |
AUD | 0.72% | 0.50% | 0.23% | -0.32% | 0.52% | 0.09% | 0.54% | |
NZD | 0.64% | 0.42% | 0.15% | -0.40% | 0.43% | -0.09% | 0.46% | |
CHF | 0.19% | -0.03% | -0.32% | -0.87% | -0.02% | -0.54% | -0.46% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Conversely, if USD/JPY climbs past 157.00, it clears the path to challenge the Tenkan-sen at 157.41. On further strength, the next resistance will be the 158.00 mark.
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