Forex: USD/JPY: Japan’s Capital Spending misses expectations at 1.5%

on Dec 2, 2013
Updated: Oct 21, 2019
Listen Monday, December 2nd:_ The USD/JPY last week scored its fifth consecutive week in ascent, adding 1.19 percent for a total gain of 4.86 percent over that five-week period. The pair also reached its highest level since 23 May at 102.60. And the month of November produced the biggest price gain since January.

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Since last week, the MACD (9, 12, 1) has been drawing lower highs on the 4H chart, while the price action has been climbing to higher highs, a condition known as divergence and indicating a weakening bullish pressure and suggesting that the price may retreat. The daily stochastic is also pointing at the prospect of retracement, currently resident above its 80-line and signifying an overbought market.

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The overall market sentiment nonetheless remains bullish, with the 89-and 200-period simple moving averages currently positioned beneath the price action on the 1H, 4H, daily and weekly charts, on which time-frames the MACD indicator is also positive.
Asian trading in the new week and month saw a rise to an intraday high so far of 102.58 and then a fall to what remains the day’s low of 102.21. At the moment the price is trading at 102.54, 0.05 percent above the opening level.

During the Asian session today, Japan’s Ministry of Finance released Capital Spending y/y as growth of 1.5 percent in the third quarter, disappointing analyst expectations for a 3.1 percent rise. The prior period showed zero percent change.

Also during Asian trading, Bank of Japan governor Haruhiko Kuroda spoke in Nagoya about the influence of overseas factors on Japan’s economy, saying that these factors were the main risks in meeting the BoJ’s two percent price stability target. Kuroda reiterated that the central bank was “ready to adjust monetary policy without hesitation if upside or downside risks materialize”.

In the US, ShopperTrack-registered sales during Thanksgiving and Black Friday rose just 2.3 percent compared with the 2012 holiday, while the National Retail Federation has calculated that spending over the long weekend dropped to $57.4 billion from last year’s $59.1 billion.
US Fed chairman Ben Bernanke is scheduled to speak at 13.30 UTC today at the National College Fed Challenge in Washington DC.
The Institute for Supply Management’s US Manufacturing PMI for November comes out today. The consensus is for a drop to 55.5 points from the prior 56.4.
Resistances today: 102.65, 102.90/103.00 and 103.15.
Supports: 102.40, 102.15 and 102.00.
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