Home USD/JPY Breaks Above Uptrend Resistance as Japan’s Trade Deficit
Forex News Today: Daily Trading News

USD/JPY Breaks Above Uptrend Resistance as Japan’s Trade Deficit

Japan’s exports fell by 10.3% in September (year over year). This includes a big drop in exports to China, which dropped by just over 14%. The drop could be partially attributed to the dispute over the Senkaku /  Diaoyu  islands.

Together with a rise of 4.1% in imports, Japan’s trade deficit rose to 558.6 billion yen.  USD/JPY resumed its rises and broke above uptrend resistance, escaping the channel. A confirmation is still awaited.

As you can see on the chart, uptrend resistance began at the beginning of October and runs in parallel with uptrend support that began earlier. Dollar/yen is currently above this line (visible also on daily charts), but hasn’t broken the 79.70 line, which defends the round 80 figure.

USD JPY Uptrend Resistance Broken October 22 2012
USD JPY Uptrend Resistance Broken – Click image to enlarge

Japan’s higher trade deficit cannot be blamed only China.  huge drop of 26% has been seen in Japanese exports to Western Europe. This compares with almost no change in exports to the US.

The high value of the Japanese, together with the slowdown in China and the debt crisis in Europe could be blamed for the drop in exports. Regarding imports, this is an ongoing process that began with the horrible catastrophe of March 11th 2011. The closure of  Fukushima led to more nuclear power plant closures and Japan is now importing oil for its energy needs.

The US has sent ex-security experts to the region to try to mediate between China and Japan over the islands’ dispute.

Further reading:  Is USD/JPY Ready to Rally?

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.