USDJPY’S Gains continue unabated

USDJPY, H1

The dollar remained firm following the consumer confidence and new home sales data, with both beating expectations. USDJPY remains near trend highs at 109.12, while EURUSD slipped slightly to 1.2220. USDJPY’s gains continue unabated, topping so far at 109.16 in N.Y. morning trade, to levels last seen on February 9. Firm Treasury yields, as opposed to Japan’s near zero rate policy, gives the dollar a nearly 250 basis point (3-month) advantage. Higher equities, and easing geopolitical concerns have also been drivers.

U.S. new home sales surged 4.0% to 0.694 mln in March, better than expected, after climbing 3.6% to an upwardly revised 0.667 mln in February (was 0.618 mln). January was bumped up to 0.644 mln from 0.622 mln. The 15.4% surge in November to a 0.711 mln pace was the fastest in more than a decade. Regionally, sales in the West and South led the gains, while sales in the Midwest and Northeast declined. The months’ supply of homes slipped to 5.2 from 5.4 (revised from 5.9). The median price increased 3.5% to $337,200 after a 0.3% dip to $325,800 (revised from $326,800). Prices are up 4.8% y/y versus 9.3% y/y (revised from 9.7% y/y).

U.S. consumer confidence rose 1.7 points to 128.7 in April after falling 3.0 points to 127.0 in March (revised from 127.7). The present situations index improved to 159.6 from 158.1 (revised from 159.9). The expectations index climbed to 108.1 from 106.2. The labor market differential slipped to 22.9 from 23.8 (revised from 25.0). The 12-month inflation index was steady at 4.7% (March revised from 4.6%). The report is better than forecast.

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