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Greenback Under Pressure Again Versus The Japanese Yen

ByFX Recommends
Published 04/30/2012, 11:27 PM
Updated 03/09/2019, 08:30 AM
USD/JPY
-0.07%

The greenback came under pressure again versus the Japanese yen following the release of March US consumer spending, which came up monthly by 0.3%. The consensus was referring to a rise of 0.4% after rising by 0.9% in February, indicating an easing of US consumer spending after US consumer confidence of April came last week at 69.2. Consumer confidence was expected to rise to 69.7 from 69.5 in March increasing the speculations of having more Fed stimulus as its inflation preferred gauge PCE came today down to 2.1% y/y in March. It was expected to slide to 2.2% from 2.3% in February showing easing of the inflation pressure in the same time.

The greenback is trading now again below 80 psychological level versus the Japanese yen which is underpinned after BOJ raised its JGB purchase by just Y10 trillion extending its 2-year maturity purchase of them to three years and extending the deadline of its asset purchasing plan 6 months to June 2013, buying 3 more years of corporate bonds, showing its belief in reaching the short-term inflation target which it placed at 1% y/y last February.

The Japanese yen could use the dovish sentiment as a low yielding funding currency following theweak consuming figure. USD/JPY can meet now other supporting levels 78.97, 78.17, 77.35, 76.47 before 76.01 whereas it has started rising to 84.16 underpinned by the recent BOJ easing steps for fighting deflation and stimulating the economy which weighed down on the Japanese yen versus the greenback. If this pair rises again, it can face a resistance level at 81.76 and can be followed by 83.37 before 84.16 again.

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