- Japanese Yen Benefits Amid Weak US Data and Risk Aversion.
- DXY trims losses and turns positive during the American session.
- USD/JPY has the biggest weekly loss in a year.
The USD/JPY extended weekly losses and fell to 113.47, hitting the lowest level since December 20. It then recovered, rising to 113.80. The dollar is having the worst weekly performance against the yen in years.
Another day, another loss
On Friday, USD/JPY falls for the third day in a row and for the sixth time in the last seven trading days. The latest intraday leg lower came after the US Retail Sales report showed an unexpected 1.9% drop in December. A different report showed that industrial production fell 0.1% in December against expectations for a 0.4% rise. Also, consumer confidence data was worse than expected.
The figures contributed to the deteriorating market sentiment that is helping the yen. The Dow Jones falls 0.70% and the Nasdaq 0.15%. In Europe, the main stock market indices closed lower.
USD/JPY: Next week
The loss of 115.00 on Wednesday and 114.00 on Friday calls into question the rest of USD/JPY’s gains since early December and opens the region at 112.00 and 111.00, warns Joseph Trevisani, Senior Analyst at FXStreet. “There is reasonable technical support up to 113.00, but the area below 112.00 was broken through in just two trading sessions in early October and is quite vulnerable.”
Trevisani points out that the Bank of Japan meeting on Tuesday will not produce policy changes in the coming week, and if the bank reveals a new economic support package, it will have little impact on the market. “December National CPI Will Not Alter BOJ’s View On Inflation.”
US economic data includes housing market numbers with existing home sales, building permits and housing starts for December, “interesting but not market driving statistics.”