USD/JPY slips beneath 136.00 on upbeat Japan Retail Trade, softer yields, focus on Fed’s Powell


  • USD/JPY takes offers to refresh daily lows, snaps three-day uptrend around weekly top.
  • Japan Retail Trade rose past market expectations and previous readings in May.
  • Yields remain pressured for the second day amid recession/inflation fears, BOJ’s Kuroda reiterates support for easy money policies.
  • US data, Fed Chair Powell’s appearance at ECB Forum are important catalysts for fresh impulse.

USD/JPY consolidates weekly gains during Wednesday’s sluggish Asian session, refreshing intraday low around 135.90 by the press time. In doing so, the yen pair snaps a three-day uptrend around a one-week high. The quote’s latest weakness could be linked to the strong retail trade data from Japan, as well as downbeat Treasury yields.

Japan Retail Trade for May rose to 3.6% YoY versus 3.3% expected and 3.1% upwardly revised prior. The Large Retailer Sales rallied by 8.5% compared to 1.3% expected and 4.0% prior.

On the other hand, the market’s indecision over the economic stand, as well as the fears of inflation, joins the hawkish Fedspeak to weigh on the US Treasury yields, which in turn drown the USD/JPY prices of late. That said, the US 10-year Treasury yields drop for the second consecutive day to 3.157% whereas the S&P 500 Futures print mild losses by the press time.

A jump in the one-year US consumer inflation expectations joined hawkish Fedspeak to renew the fears of faster Fed rate hikes. To talk about the data, the US Conference Board (CB) Consumer Confidence Index dropped for the second consecutive month in June, to 98.7 versus 100.0 expected and 103.2 in May. In doing so, the widely followed consumer sentiment gauge dropped to the lowest level since February 2021. Further details revealed that the one-year consumer inflation rate expectations climbed to 8% from May's revised print of 7.5. It should be noted that the US trade deficit dropped to the lowest in a year, to $104.3 billion, per the latest release for May.

Elsewhere, the Group of Seven (G7) nations announced restrictions on Russian oil prices while the North Atlantic Treaty Organization (NATO) meeting signals not a welcome environment for China. Furthermore, US Deputy Commerce Secretary Don Graves said, “A clear US response on China tariffs is coming soon,” per Bloomberg TV, which in turn raises fears of the fresh Sino-American tussles.

Other than what’s already mentioned above, recent comments from Bank of Japan (BOJ) Governor Haruhiko Kuroda also weigh on the USD/JPY prices. “Unlike other economies, the Japanese economy has not been much affected by the global inflationary trend so monetary policy will continue to be accommodative,” said BOJ’s Kuroda.

Looking forward, the US Core Personal Consumption Expenditure (PCE) for Q1 2022, expected to remain unchanged at 5.1%, will be important. On the same line will be the final readings of the US Q1 GDP, which is likely to confirm a 1.5% Annualized contraction. Above all, the central bankers’ discussions at the ECB Forum will be the key for the market players to watch for clear directions.

Technical analysis

A clear upside break of the weekly resistance line and successful trading beyond the 10-DMA, respectively around 134.75 and 135.30, propels USD/JPY towards a monthly peak of 136.75.

Additional important levels

Overview
Today last price 135.95
Today Daily Change -0.17
Today Daily Change % -0.12%
Today daily open 136.12
 
Trends
Daily SMA20 133.95
Daily SMA50 130.83
Daily SMA100 125.11
Daily SMA200 119.48
 
Levels
Previous Daily High 136.38
Previous Daily Low 135.11
Previous Weekly High 136.72
Previous Weekly Low 134.26
Previous Monthly High 131.35
Previous Monthly Low 126.36
Daily Fibonacci 38.2% 135.9
Daily Fibonacci 61.8% 135.6
Daily Pivot Point S1 135.36
Daily Pivot Point S2 134.6
Daily Pivot Point S3 134.09
Daily Pivot Point R1 136.63
Daily Pivot Point R2 137.14
Daily Pivot Point R3 137.9

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD: Corrective pullback fades around 0.6900, Taiwan, US inflation in focus

AUD/USD: Corrective pullback fades around 0.6900, Taiwan, US inflation in focus

AUD/USD struggles to extend the week-start gains as the Aussie traders flirt with the 0.6900 threshold amid a risk-off mood during Monday’s Asian session. The Sino-American tension over Taiwan joins recently hawkish bets over the Fed appear to challenge the pair buyers, due to its risk barometer status.

AUD/USD News

EUR/USD: Bears moving in across the timeframes

EUR/USD: Bears moving in across the timeframes

The EUR/USD price on the weekly chart has corrected to a 50% mean reversion of the prior weekly sell-off. Last week's sell-off could be the start of the bearish extension. On the daily chart, the price has left behind a failed inverse head and shoulders.

EUR/USD News

Gold slides towards $1,750 as Fed, Taiwan concerns favor DXY bulls

Gold slides towards $1,750 as Fed, Taiwan concerns favor DXY bulls

Gold price remains pressured near $1,773, down 0.10% intraday, as risk-aversion underpins the US dollar’s safe-haven demand during Monday’s Asian session. Also keeping the greenback buyers hopeful are the recently increased hopes of Fed 0.75% rate hike in September.

Gold News

Shiba Inu price hints at a 150% upswing, an opportunity too good to pass up

Shiba Inu price hints at a 150% upswing, an opportunity too good to pass up

Shiba Inu price has been hovering around a significant barrier for roughly three months with virtually no momentum to move above it. This development might be primed for a strong move but the directional bias remains unknown. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures