USDJPY loses 1.15% 📉

10:32 am 29 November 2024

🚩USDJPY drops below 150 as markets react to higher than expected flash Tokio CPI reading

The Japanese yen is recording a very strong appreciation today, and we can look for reasons for this in today's inflation data from the Tokyo region. The market took the higher-than-expected reading of price pressures from Japan as a sign of a likely BoJ rate hike in December, about which economists are still not convinced. The pair fell from a high of 156 in mid-November, breaking an upward streak, and is now trading below the psychological barrier of 150. The sell-off on USDJPY is also driven by the weakening US dollar, which is today one of the weakest G10 currencies; USDIDX loses 0.4%.

  • Preliminary CPI inflation from the Tokyo region, rose 2.6% y/y in November; beating forecasts of 2.2% after 1.8% previously, and core CPI of 2.2%, against 2% forecasts and 1.8% previously. Fresh food prices excluding energy rose 1.9% y/y, in line with forecasts. The unemployment rate indicated 2.5%, vs. 2.4% previously
  • Other data from Japan fared less well, however. Japan's industrial production in October rose 1.6% year-on-year, below the 2% forecast. On a month-to-month basis, it rose 3% versus 4% forecasts and 1.6% previously. However, the economy ministry estimates that output will fall -2.2% m/m in November and -0.5% m/m in December
  • Japan's retail sales in October rose 1.6% y/y, forecast to rise 2% after 0.5% in September. Month-on-month growth indicated 0.1% versus 0.4% forecasts. Japanese consumer sentiment indicated 36.4, versus 36.5 expectations, slightly above 36.2 previously. House construction starts fell -2.9% y/y vs. -2% forecasts and -0.6% decline previously. 

Published data from Japan at first glance gives a mixed picture, as inflation rose slightly more than expected, but retail sales and industrial production disappointed forecasts. Still, both industrial and retail sales data were higher year-on-year and month-on-month. The Bank of Japan will decide on interest rates on December 18, and USDJPY quotes seem to reflect a slightly higher probability of a rate hike. 

USDJPY (D1 interval)

The dollar-yen pair is retreating below the 200-session exponential moving average (the red line EMA200) on the daily interval today, signaling a potential trend reversal. For the bulls, the target now remains the 150 level, which has turned from support into resistance.

Source: xStation5

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

Share:
Back

Join over 1 600 000 XTB Group Clients from around the world.