For the 24 hours to 23:00 GMT, the USD strengthened 0.06% against the JPY and closed at 102.28
In economic news, Japan’s industrial output fell more than market estimations in June as it recorded a drop of 3.4% on a monthly basis. In the previous month, it had registered a rise of 0.7%. Additionally, capacity utilization slid 3.3% in June, compared to a drop of 0.7% in the previous month. Similarly, the Tokyo condominium sales eased 20.4% on an annual basis, in July. In the previous month, it had registered a drop of 28.3%.
In the Asian session, at GMT0300, the pair is trading at 102.29, with the USD trading tad higher from yesterday’s close, as Japan’s economy registered its worst GDP data since 2011. The Japanese GDP dropped by 1.7% in Q2, on a quarterly basis, compared to 1.6% contraction expected by market, as consumption slumped after an increase in the sales tax. Elsewhere, the Japanese economy minister, Akira Amari noted that there has been no change to government’s view on the economy after the GDP data. He further added that “Japan’s economy likely to continue moderate recovery as effect of tax hike begins to wane; want to closely watch developments, including overseas economies; ready to take flexible policy response to pull economy on steady growth path at early date.”Additionally, the BoJ, in its minutes, reiterated that its ultra-loose monetary policy is having the desired impact on the nation’s economy and will achieve the 2% inflation target, although the sales tax hike has hampered nation’s domestic demand. The policymakers further added that the central bank has lowered Japan’s economic outlook for 2014 due to sluggish exports of the nation.
The pair is expected to find support at 102.12, and a fall through could take it to the next support level of 101.96. The pair is expected to find its first resistance at 102.42, and a rise through could take it to the next resistance level of 102.55.
Trading trends in the Yen today are expected to be determined by Japan’s machine orders, scheduled in the midnight.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.