The Japanese yen rebounded with strong gains, as USD/JPY slipped 220 points. The pair closed the week at 112.41, marking the lowest weekly close since the end of November 2016. There are nine events on the calendar. Here is an outlook for the highlights of this week and an updated technical analysis for USD/JPY.
It’s been a rocky start for Donald Trump’s Presidency, who has picked fights with Mexico and Australia but hasn’t outlined economic or fiscal policies. US job numbers were mixed, as Nonfarm Payrolls was better than expected but wage growth was weaker than expected. In Japan, Household Spending posted another decline, but managed to beat expectations. As expected, the BoJ held interest rates at -0.10%.
Updates
USD/JPY graph with support and resistance lines on it. Click to enlarge:
Average Cash Earnings: Monday, 00:00. The indicator edged up to 0.2% in November, matching the forecast. The upward trend is expected to continue in December, with an estimate of 0.4%.
Leading Indicators: Tuesday, 5:00. The indicator continues to rise, and reached 102.7% in November, just above the forecast of 102.6%. The indicator is expected to rise in December to 105.6%.
BoJ Summary of Opinions: Tuesday, 23:50. This report follows the January monetary policy statement, in which the BoJ maintained interest rates at -0.10%. Analysts will be combing through the report, which contains the bank’s forecasts for inflation and economic growth.
Economy Watchers Sentiment: Wednesday, 5:00. The indicator improved to 51.4 in December, pointing to optimism. This beat the forecast of 49.3. The upswing is expected to continue, with a forecast of 51.9.
Core Machinery Orders: Wednesday, 23:50. The indicator has been struggling, recording three declines in the past four readings. In November, the indicator declined 5.1%, its sharpest drop since April 2016. The markets are expecting a strong turnaround in December, with an estimate of 3.2%.
30-y Bond Auction: Thursday, 3:45. The yield on 30-year bonds continues to rise, reaching 0.75% in January.
Preliminary Machine Tool Orders: Thursday, 6:00. This manufacturing indicator posted a strong gain of 4.4% in December, breaking a nasty trend of 16 straight declines. Will the positive news continue in January?
PPI: Thursday, 23:50. This inflation indicator continues to post declines. Still, the readings have been improving, as the December report posted a decline of 1.2%. The markets are expecting a flat reading of 0.0% in January.
Tertiary Industry Activity: Friday, 4:30. The indicator has posted two straight readings of 0.2%. The markets are braced for a decline of 0.1% in December.
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