Japanese household spending slumped as the recent sales tax has taken a bite out of consumers’ pockets. The indicator fell by 4.8% in December, marking a third straight decline. The estimate stood at -1.7%.
In the U.S. there was good news from the manufacturing sector, as ISM Manufacturing PMI rose to 50.9 in January, up from 47.2 a month earlier. This figure beat the forecast of 48.5 points. This marked the first showing expansion since July. The week wrapped up with employment data, which was mixed. Wage growth came in at 0.2%, shy of the estimate of 0.3%. Nonfarm payrolls sparkled with a gain of 225 thousand. This was much stronger than the forecast of 163 thousand.
Key news updates for USD/JPY
USD/JPY Technical Analysis
113.15 was a swing high back in July.
112.73 was an important resistance line in October.
112.25 has held in resistance since December. 111.69 follows.
110.62 could be under pressure if USD/JPY continues to gain ground.
109.73 is fluid, as the pair ended the week just above this line.
108.70 is providing support.
108.10 last saw action in the first week in January.
107.30 (mentioned last week) has provided support since October 2019. 106.61 is next.
105.55 is the final support level for now.
USD/JPY Daily Chart
I am bullish on USD/JPY
The China coronavirus has hurt risk appetite, which should be bullish for the safe-haven yen. However, the outbreak will likely take a bite out of Japan’s economy, as tourism, services and other sectors have already been damaged by the virus. This could mean trouble for the fragile Japanese economy.