USD/JPY continues to show movement in December, as the yen gained close to 300 points last week. This week’s key event is the BOJ Policy Statement. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. The US dollar boasted some upbeat data last week, including a strong retail sales report and an excellent consumer confidence report. However, this was not enough to stem last week’s yen sharp correction. In Japan, manufacturing data dropped sharply and Final GDP posted a second straight decline in Q3. Will the correction of the yen continue or can the Fed give the pair another boost higher? [do action=”autoupdate” tag=”USDJPYUpdate”/]USD/JPY graph with support and resistance lines on it: Lower House Elections: Sunday, All Day. Prime Minister Shinzo Abe surprised observers by calling a snap election and his political gamble seems to have paid off in spades, as Abe’s Liberal Democratic Party appears to be headed to a landslide victory. This will allow Abe to continue to press economic reforms in order to kick-start the sluggish Japanese economy. Tankan Manufacturing Index: Monday, 23:50. The indicator is a key gauge of the manufacturing sector. The index improved slightly in Q3, with a reading of 13 points, easily beating the forecast of 10 points. No change is expected in the Q4 release. Tankan Non-Manufacturing Index: Monday, 23:50. The index has been losing ground recently, and slipped to 13 points in Q3, short of the estimate of 17 points. This was the index’s worst showing in five quarters. The forecast for the Q4 release stands at 14 points. Flash Manufacturing PMI: Tuesday, 1:35. This minor event has been fairly steady and came in at 52.1 points in November. Little change is expected in the upcoming reading. Trade Balance: Tuesday, 23:50. Japan continues to post trade deficits, with the last release improving to JPY -0.98 trillion. The markets are expecting more of the same in the November release, with an estimate of -0.99 trillion yen. BOJ Monetary Policy Statement: Friday, Tentative. The BOJ statement and follow-up press conference will be closely watched, coming just a few days after the Japanese elections. Any unexpected announcements regarding monetary policy could move USD/JPY. All Industries Activity: Friday, 4:30. This indicator measures the total value of goods and services purchased by businesses. The indicator posted a strong gain of 1.0% in October, following three straight declines. The markets are expecting a weak gain of 0.2% in the upcoming release. * All times are GMT USD/JPY Technical Analysis Dollar/yen started the week at 121.61. The pair touched a high of 121.70 and then dropped sharply, as the pair broke below support at 117.94 (discussed last week). The pair touched a low of 117.44, before rebounding to close the week at 118.74. Live chart of USD/JPY: [do action=”tradingviews” pair=”USDJPY” interval=”60″/]Technical lines from top to bottom: With USD/JPY showing sharp losses, we start at lower levels: 124.16 marked the start of a yen rally in June 2007, which saw USD/JPY drop to the 96 level. 122.19 was under some pressure at the start of the week, but has strengthened as the pair dropped sharply. This line has held firm since July 2007. The next resistance line is 121.39. 119.88 was easily breached as the yen posted strong gains. It is a strong resistance line. 117.94 was tested but remains in a support role. 116.82 last saw action in mid-November, in the midst of a dollar rally which saw USD/JPY climb above the 121 line. 114.65 has remained intact since December 2007, when the yen was in the midst of a strong yen rally which saw USD/JPY drop below the 96 line. 113.68 is the final support level for now. It has held firm since early November. I am bullish on USD/JPY With the yen trading above 121 at the start of the week, a sharp correction by the currency was not completely unexpected. Still, the yen remains at low levels and the monetary divergence will continue to weigh on the pair. As well, the US economy is showing broad strength and continues to outperform its Japanese counterpart. In our latest podcast we talk about US jobs, the ECB’s dilemma, a run down of slippery oil and an interesting interview with Itai Furman. Download it directly here. Subscribe to our podcast on iTunes. 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. Kenny Fisher Kenny Fisher 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. Kenny's Google Profile View All Post By Kenny Fisher MajorsUSD JPY ForecastWeekly Forex Forecasts share Read Next GBP/USD Forecast Dec. 15-19 Kenny Fisher 8 years USD/JPY continues to show movement in December, as the yen gained close to 300 points last week. This week's key event is the BOJ Policy Statement. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY. The US dollar boasted some upbeat data last week, including a strong retail sales report and an excellent consumer confidence report. However, this was not enough to stem last week's yen sharp correction. In Japan, manufacturing data dropped sharply and Final GDP posted a second straight decline in Q3. Will the correction of the yen continue… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk.3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk.4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk.5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.