USD/JPY: Break below 137.50 to set up a test of August 23 low near 135.80 – BBH
|USD/JPY touched its lowest level since late August at 137.50 on Monday. A break below here would open up the August 23 low near 135.80, economists at BBH report.
Japan reported October labor market and Retail Sales data
“USD/JPY remain heavy near 138 and seems likely to test yesterday’s cycle low near 137.50. A break below would set up a test of the August 23 low near 135.80.”
“The unemployment rate was expected to fall a tick to 2.5% but remained steady at 2.6%, while the job-to-applicant ratio rose a tick as expected to 1.35. Despite the firm labor market, wage growth remains low. Until we see wage growth pick up further, the BoJ is likely to remain on hold.”
“Sales came in at 0.2% MoM vs. 1.0% expected and a revised 1.5% (was 1.1%) in September. As a result, the YoY rate came in at 4.3% vs. 5.1% expected and a revised 4.8% (was 4.5%) in September. Recent weakness in the real sector data should also keep the BoJ on hold.”
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