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Japan’s economy contracted 1.8%, a sharper decline than the forecast of -1.7%. This marked the first decline in five quarters and points to weakness in the Japanese economy.
The coronavirus outbreak has led to a full-blown national emergency in the U.S. President Trump banned flights from Europe, which sapped risk appetite and sent investors scurrying to the U.S. dollar. Inflation levels remained low in February, with CPI coming in at 0.1% and Core CPI at 0.2%. Consumer confidence dropped sharply in February, falling from 100.9 to 95.9 points.
Updates:
We start with resistance at 111.69. 110.62 is next.
109.73 has switched to a resistance role after sharp gains by USD/JPY last week.
108.70 (mentioned last week) was breached at the end of the week.
108.10 is an immediate resistance line.
107.30 is providing support.
106.61 is next.
105.55 has some breathing room following strong gains by USD/JPY last week.
104.65 is the final support line for now.
USD/JPY Sentiment
I am bullish on USD/JPY
The Japanese yen is a safe-haven asset, but investors were seeing all green last week, as the U.S. dollar enjoyed broad gains, including versus the yen. As well, the Japanese economy is dependent on trade with China, so the economic upheaval in China is weighing heavily on the Japanese economy.
Safe trading!
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