The Japanese yen was on the defensive in the wake of the new fiscal year in Japan. It finally broke above the range. Can USD/JPY continue even higher? The rate decision in Japan takes center stage in a busy week. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. More disappointing Japanese data was released: industrial output dropped by 2.3% instead of rising, and also the Tankan Manufacturing Index advanced less than expected. If the Japanese economy wasn’t doing that well before the tax hike, will it suffer even more now? Will this trigger more steps from the BOJ? We might get some answers this week. US Non-Farm Payrolls slightly missed with 192K and this allowed the pair to take profit and fall below 104. [do action=”autoupdate” tag=”USDJPYUpdate”/] USD/JPY graph with support and resistance lines on it. Click to enlarge: Leading Indicators: Monday, 5:00. This compound index consists of 11 indicators and it reached 113.1% in January, better than expected. A small drop is expected for the month of February. Current Account: Monday, 23:50. Japan suffers from a current account deficit as an outcome of the March 2011 tragedy. Since then, it needs to import much more energy than beforehand. After reaching a deficit of 0.59 trillion yen in January, a smaller deficit is likely now. Rate decision: Tuesday. The Bank of Japan convenes in the one year anniversary of the big plan announced by governor Kuroda as he entered office. And now, the sales tax hike threatens to slow down the Japanese economy. Most analysts don’t expect any big steps at the moment in the rate decision due during the Asian session. However, the governor could hint something for the next meetings in the press conference that is usually held early in the European session. Economy Watchers Sentiment: Tuesday, 5:00. The survey of 2000 workers dropped for a second month in a row in February to 53 points. This measure of consumer spending is expected to rise in the last month before the tax hike. BOJ Monthly Report: The monthly report from the Bank of Japan provides an outlook on the economy as the bank sees it. This is the data seen by the members before making their decision. The view about the recent slowdown will be interesting. Core Machinery Orders: Wednesday, 23:50. This measure of orders at the pre-manufacturing level has an impact because it indicates future production. The core figure excludes utilities and ships, thus further refining the data. After a leap of 13.4% in January, a drop is likely in this volatile indicator. Machine Tool Orders: Wednesday, 6:00. This is a similar indicator, but it comes from a private association, the Japan Machine Tool Builders Association and not from the government. Year over year, orders grew 26.1% in February and are expected to post a similar growth rate in March. BOJ Meeting Minutes: Thursday, 23:50. A look into the discussions of policymakers is interesting, but the effect isn’t that strong as the minutes refer to a meeting held in the past and not to the fresh one made just a few days earlier. M2 Money Stock: Thursday, 23:50. This measure of money in circulation is another measure followed by the BOJ in its quest to battle deflation. After seeing a worse than expected growth rate of 4% in February, a stronger year over year growth rate is likely in March. CGPI: Thursday, 23:50. The Corporate Goods Price Index is another minor measure of inflation at the corporate level. The CGPI turned positive in April 2013 and eventually peaked at 2.6% in November. However, recent data disappointed with a drop to 1.8% in February. A level of 2% or more is likely for March. * All times are GMT. USD/JPY Technical Analysis Dollar/yen started off the week with a decisive break out of range, climbing above the 102.74 level (mentioned last week). The decisive break proved strong and the pair peaked just under 104 before consolidating. Technical lines from top to bottom The top line is the peak seen in the turn of the year: 105.44. This was challenged several times. Below, 104.80 capped the pair during January. 104.10, the high of April 2014 is currently a minor line, but should be watched. Below, 103.77 provided support for the pair in January and served as a clear separator of ranges. 102.74 was a stubborn peak during February and is the top line of the current trading range. 102 is a round number that provided support to the pair in late January and is now a pivotal line in the range. 101.20 provided strong support for the pair during March 2014 and is the low line of support. I remain bullish on USD/JPY Japan did not need the dreaded sales tax hike to see some kind of slowdown. On this background, the BOJ is certainly able to act. This might not come as early as now, the first anniversary for Kuroda’s monetary blitz, but hints could be released. In the US, it seems that the economy is picking up in the spring, thus making Yellen’s hawkish comment more powerful than her dovish ones. The miss in the NFP only allowed for consolidation, but the pair can continue higher. The kiwi is among the 5 most predictable currency pairs Further reading: For a broad view of all the week’s major events worldwide, read the USD outlook. For EUR/USD, check out the Euro to Dollar forecast. For GBP/USD (cable), look into the British Pound forecast. For the Australian dollar (Aussie), check out the AUD to USD forecast. For USD/CAD (loonie), check out the Canadian dollar forecast. For the kiwi, see the NZDUSD forecast. 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. Yohay's Google Profile View All Post By Yohay Elam MajorsUSD JPY Forecast share Read Next GBP/USD Outlook April 7-11 Kenny Fisher 8 years The Japanese yen was on the defensive in the wake of the new fiscal year in Japan. It finally broke above the range. Can USD/JPY continue even higher? The rate decision in Japan takes center stage in a busy week. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. More disappointing Japanese data was released: industrial output dropped by 2.3% instead of rising, and also the Tankan Manufacturing Index advanced less than expected. 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