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Japan’s consumer inflation remains subdued. National Core CPI dipped to 0.3% in August, down from 0.5% a month earlier. This was the indicator’s weakest gain since March 2017. BoJ Governor Kuroda noted that CPI is around 0.5%, well off the BoJ’s inflation target of 2.0%. Kuroda said that the bank would increase the monetary base until the bank’s target was met.
There was disappointing news out of the U.S., as retail sales contracted in September. The headline reading declined by 0.3%, after a gain of 0.4% in the previous release. Core retail sales declined 0.1%, missing the estimate of 0.2%. There was no relief from the manufacturing front, as Philly Fed Manufacturing Index dropped to 5.6 in October, compared to 12.0 points a month earlier.
Updates:
We start with resistance at 111.62, which was last active in April. 110.62 is next.
109.73 has held in resistance since the end of May. 109.35 is close by.
108.70 remains an immediate resistance line.
108.10 remains relevant and has switched back to a support role.
107.30 has some breathing room in support. This line switched to support in early October, at the start of the most recent dollar rally.
106.61 is next.
105.55 has held in support since late August.
104.65 was last tested in January. It is the final support line for now.
I remain bullish on USD/JPY
The U.S. economy may be showing signs of a slowdown, but there hasn’t been much to attract investors to the safe-haven Japanese yen. With a strong possibility that a Brexit deal is finally at hand and trade talks continuing between the U.S. and China, risk apprehension remains low, for now.
Further reading:
Safe trading!
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