The case for further easing by the Bank of Japan is building. Japanese economy contracted in Q2. GDP fell by an annualized 1.6%. Japan’s export growth slowed in July, while private sector demand is low.
On Friday, Japan will release inflation and retail sales figures. According to the Reuters poll, core consumer prices in Japan have slipped in July, the first fall in more than 2 years. Other data may to provide some positive news: according to the forecasts, household spending probably rose in July as hot weather spurred sales of summer clothing and air conditioners. Retail sales are expected to show a 1.1% gain in July on-year, up for the four straight month, though the pace of growth has moderated in the past few months.
There are some expectations of the Bank of Japan’s additional monetary stimulus in October. These expectations will provide some support for the pair. However, the central bank is very unlikely to make any new steps before the Federal Reserve’s meeting on September 17.
All in all, we expect USD/JPY to remain under pressure. Next support is in the 122.30/00 psychological area and at 121.50 (2015 uptrend line). On the upside resistance is at 123.60 and 124.50.
USD/JPY, daily
Recommended Content
Editors’ Picks
EUR/USD consolidates recovery below 1.0700 amid upbeat mood
EUR/USD is consolidating its recovery but remains below 1.0700 in early Europe on Thursday. The US Dollar holds its corrective decline amid a stabilizing market mood, despite looming Middle East geopolitical risks. Speeches from ECB and Fed officials remain on tap.
GBP/USD advances toward 1.2500 on weaker US Dollar
GBP/USD is extending recovery gains toward 1.2500 in the European morning on Thursday. The pair stays supported by a sustained US Dollar weakness alongside the US Treasury bond yields. Risk appetite also underpins the higher-yielding currency pair. ahead of mid-tier US data and Fedspeak.
Gold appears a ‘buy-the-dips’ trade on simmering Israel-Iran tensions
Gold price attempts another run to reclaim $2,400 amid looming geopolitical risks. US Dollar pulls back with Treasury yields despite hawkish Fedspeak, as risk appetite returns.
Manta Network price braces for volatility as $44 million worth of MANTA is due to flood markets
Manta Network price is defending support at $1.80 as multiple technical indicators flash bearish. 21.67 million MANTA tokens worth $44 million are due to flood markets in a cliff unlock on Thursday.
Investors hunkering down
Amidst a relentless cautionary deluge of commentary from global financial leaders gathered at the International Monetary Fund and World Bank Spring meetings in Washington, investors appear to be taking a hiatus.