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There have been signs of a slowdown in the Japanese economy, since a new sales tax was introduced in October. The sales tax was raised from 8 to 10 percent, and has dampened consumer spending. Still, the BoJ left its ultra-easy monetary policy in place and said it would maintain its huge asset purchase program.
The U.S. posted solid numbers last week, underscoring positive economic conditions. Manufacturing PMI improved to 52.5 in December, just shy of the estimate of 52.6 pts. This was the indicator’s strongest gain since March and points to modest expansion. The week ended with Final GDP, which was unrevised at 2.1 percent.
Updates:
We start with resistance at 112.25.
111.62 has held in resistance since April. 110.62 is next.
109.73 is an immediate resistance line.
109.35 is a weak support line. 108.70 is next.
108.10 is protecting the round number of 108.
107.30 (mentioned last week) switched to support in early October.
106.61 is next.
105.55 has held in support since late August. It is the final support level for now.
I remain bullish on USD/JPY
Risk appetite remains strong, supported by the recent trade deal reached between the U.S. and China. This should bolster global growth and could weigh on the safe-haven yen.
Further reading:
Safe trading!
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