In the U.S., business activity continues to expand, as Services PMI improved to 55.0, up from 53.9 points. However, employment numbers for December were a major disappointment. Nonfarm payrolls fell to 145 thousand, compared to 266 thousand a month earlier. This missed the estimate of 162 thousand. Wage growth slipped from 0.3% to 0.1% and fell shy of the forecast of 0.1%. The unemployment rate was unchanged at 3.5%.
In Japan, consumer confidence remains low. The indicator came in at 39.1, shy of the estimate of 39.6 pts. Household spending fell for a second straight month, with a reading of -2.0%.
Key news updates for USD/JPY
USD/JPY Technical Analysis
We start with resistance at 113.15.
112.73 had held in resistance since December 2018.
112.25 is the next resistance line.
111.62 has been a resistance line since April 2019. 110.62 is next.
109.73 remains relevant. It is a weak resistance line.
109.35 is an immediate support level.
108.70 has switched to support after strong gains by USD/JPY last week.
108.10 is next.
107.30 (mentioned last week) has provided support since early October 2019.
106.61 is next.
105.55 has held in support since late August. it is the final support level for now.
USD/JPY Daily Chart
I am bearish on USD/JPY
The U.S. and Iran appear to have stepped down after the U.S. killing of an Iranian general and a missile attack against U.S. bases by Iran. This could raise risk appetite and extend the yen’s slide.