The yen suffered a dismal week, plunging close to 600 points before reversing directions and dropping 400 points on the week. The yen dropped to levels not since the Brexit vote in late June, as Prime Minister Shinzo Abe’s election victory last week has paved the path for further monetary moves as part of the government’s economic platform. The government is busy preparing a fiscal stimulus package and the markets will be keeping an eye on the Bank of Japan, which meets in late July and could adopt further easing measures. The yen had gained ground after the Brexit vote, even breaking below the 100-level, as the political and economic turmoil bolstered the safe-haven yen.
US consumer indicators were on center stage on Friday, and the numbers were a mixed bag. Consumer inflation reports posted small gains of 0.2%, as inflation levels remain soft. There was better news on the consumer spending front, as Core Retail Sales posted a strong gain of 0.7%, beating the estimate. The UoM Consumer Sentiment report dipped below the 90-point level for the first time in three months, missing expectations. The Federal Reserve is unlikely to raise rates before September at the earliest, unless there is some strong improvement in economic data, particularly inflation and wage growth, which remain at low levels.
Tuesday (July 19)
- 8:30 US Building Permits. Estimate 1.15M
- 8:30 US Housing Starts. Estimate 1.17M
*All release times are EDT
USD/JPY for Tuesday, July 19, 2016
USD/JPY July 19 at 10:00 EDT
Open: 106.18 High: 106.53 Low: 105.62 Close: 106.40
- USD/JPY posted slight losses in the Asian session. The pair showed limited movement in the European session and has moved higher in North American trade
- 106.81 is a weak resistance line
- 105.87 is providing support
- Current range: 105.87 to 106.81
- Below: 105.87, 104.99, 103.73 and 102.36
- Above: 106.81, 107.65 and 108.61