USD/JPY Forecast June 17-21 – Will BoJ shake up listless yen?

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The Japanese yen had a quiet week, as Dollar/yen posted small gains last week. Investors will keep a close eye on the BoJ, which will set the key interest rate and release a policy statement.

USD/JPY fundamental movers

Japan’s economy grew an annualized 2.2% in Q1, revised upwards from the initial reading of 2.1%. At the same time, consumer spending remains weak, as wage growth has been softer than anticipated.

In the U.S., May inflation numbers were soft, as CPI and core CPI came in at 0.1%. As expected, U.S. consumer spending data improved sharply in May. Core retail sales climbed 0.5%, matching the estimate. Retail sales also improved to 0.5%, but fell shy of the forecast of 0.7%. These consumer inflation and consumer spending numbers could play a crucial role in the Federal Reserve’s forward guidance for rates. The markets are prepared for rate cuts in the second half of the year. The CME Group has set the odds of a July cut at 62% and another cut in September at 55%.

See all the main events in the Forex Weekly Outlook

Key news updates for USD/JPY

Updates:

USD/JPY Technical Analysis

112.73 was an important resistance line in October.

112.25 has held in resistance since December.

111.69 was the high point of the yen rally in the first half of May. 111.15 follows.

110.40 (mentioned last week), is the next resistance line.

109.73 has held in resistance since the end of May.

109.35 is the next resistance line.

108.70 was tested in resistance early in the week.

108.10 was a swing low in late May.

107.50 capped the pair in early April.

106.61 is next.

105.55 is the final support level for now.

USD/JPY Daily Chart

USD/JPY Sentiment

I remain neutral on USD/JPY

It’s been a lazy June for the yen, which is showing little movement. Tensions in the Persian Gulf and the ongoing trade war between China and the U.S. have not sent investors running to the safe-haven yen. The U.S. economy remains strong, but the markets are prepared for a rate cut (or two) in the second half of the year.

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Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.