USD/JPY Outlook

Discussion in 'Forex' started by nycfxproptrader, Apr 14, 2004.

  1. Further fall-out from Tuesday"s US retail sales data helped to push USD/JPY to 107.10 in Asia and 107.45 in early Europe. Small Asian offers put a top in place at the 107.45 level but the outlook is for further USD gains as US fundamentals continue to improve. A healthy inflation number for March (data due at 12:30
    GMT) would add further to the view that the Fed could hike as soon as June. The market is looking for a 0.3% price increase in March from 0.3% in February with the annual rate expected to move up to 1.9% from 1.7%. US trade data also due
    for release today, with a slight narrowing of the trade gap expected in February. Forecasts are for a USD 42.5 bln deficit vs the USD 43.06 bln recorded in January.
    From Tokyo the feeling is that the geopolitical risks are more focused on the US and that the hostage situation, while still uncertain, is not impacting that much on the market. Reuters news that Japan"s state pension fund is looking to
    invest some JPY 2.3 trln (USD 22 Bln) in foreign assets during the current fiscal year did weigh on the yen overnight.
    [USD/JPY] now looking to 108.00, a daily pivot point from mid-March, Late April.
    Initial resistance at the 107.45 top and 107.70 2% moving average band. On the pullback, look for 107.10 to stall if not hold.