USD/JPY: Yen Trading Higher

USD/JPY: Yen Trading Higher

For the 24 hours to 23:00 GMT, the USD strengthened 0.94% against the JPY and closed at 86.50.

Housing starts in Japan grew at a pace of 10.3% (YoY) in November, lower than the 25.2% growth registered in October. Also, construction orders received by 50 big contractors declined 2.1% in November, after declining 13.8% in October.

In the Asian session, at GMT0400, the pair is trading at 86.44, with the USD trading marginally lower from yesterday’s close.

Data released this morning indicated that retail sales in Japan rose 1.3% (YoY) in November, compared to a 1.2% contraction in October. Separately, the National consumer price index (CPI) retreated 0.2% (YoY) in November, in line with market estimates and compared to a 0.4% drop posted in the previous month. Also, the Nomura/JMMA manufacturing Purchasing Managers’ Index in Japan declined to a reading of 45.0 in December, compared to a reading of 46.5 recorded in November.

Moreover, the seasonally adjusted basis unemployment rate Japan retreated to 4.1% in November, compared to a 4.2% rate reported in October. Additionally, the seasonally adjusted basis, industrial production fell 1.7% (MoM) in November, compared to a 1.6% increase in October. Also, the average monthly labour cash earnings in slipped by 1.1% (YoY) in November, following a downwardly revised 0.4% fall in October.

The pair is expected to find support at 85.81, and a fall through could take it to the next support level of 85.18. The pair is expected to find its first resistance at 86.85, and a rise through could take it to the next resistance level of 87.27.