USD/JPY: Bid near 112.00 in Asia, BOJ decision and US Q1 GDP in focus this week

USD/JPY has added close to 15 pips in Asia and is currently trading just short of 112.00.
The pair seems to have picked up a bid in response to last week’s upbeat US data releases.
The JPY may come under pressure if the BOJ stresses the need to do more later this week and the US GDP betters estimates. Both data releases are scheduled for release in the second half of this week.

Omkar Godbole FXStreet Contributor

USD/JPY is currently trading at the session high of 111.98, having hit a low of 111.84 earlier today.

The US consumer spending, as represented by retail sales, surged in March by the most in a year and a half, the data released last week showed. Further, the jobless claims hit 50-year lows, quieting recession talks.

Meanwhile, the Bank of Japan (BOJ) reduced the amount of long-dated bond purchases on Friday.

As a result, it is not surprising to see that the greenback is mildly bid in Asia in holiday-thinned trade.

Looking forward: Focus on BOJ’s rate decision and US GDP release

The Bank of Japan (BOJ) is due at 02:00 GMT on April 25. The Japanese central bank is widely expected to keep rates key policy tools unchanged and Governor Kuroda will likely try to project the central bank has the room do more, contrary to the widespread belief that the bank has run out of ammo, having run an unprecedented easing program for six straight years.

The anti-risk JPY may come under pressure if the BOJ sends out a strong easing signal along with the downward revision of growth and exports forecast.

The preliminary US Gross Domestic Product (GDP), due for release at 12:30 GMT on Friday, is expected to show the economy expanded at an annualized rate of 1.8 percent in the first quarter, having expanded 2.2 percent in the fourth quarter of 2018.

That the US economy slowed down sharply in the first quarter is generally accepted by now. As a result, the dollar may remain resilient even if the US GDP prints below estimates.

Pivot points

1. R3 112.17
2. R2 112.09
3. R1 111.99
PP 111.91
1. S1 111.82
2. S2 111.74
3. S3 111.64

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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