© Dukascopy Bank SA
The USD/JPY currency cross was moving mostly to the north during the previous trading week, as it continued with the long-term trend to gain value, mostly reflecting strength of the US dollar, rather than weakness of the Japanese yen. The only significant exception was the BoJ announcement about extra stimulus to the economy a week before, when the Yen dropped considerably. Last week, however, the American data was generally moving this currency cross. Starting the week at 112.83 level, the pair did not make any attempt to jump significantly, as US fundamentals on factory orders and trade balance disappointed markets and kept the USD capped. However, the Bank of Japan Governor's speech on Wednesday forced the Yen to depreciate. For the remaining of the period the pair was influenced by data from North America, including a number of reports concerning labor market, as well as manufacturing industry and crude oil inventories. A slight majority of Dukascopy traders predicted the pair to rise and the US dollar managed to advance 180 pips in five working days.
Compared to the previous week the bullish sentiment gained even more strength, as two thirds of all votes are now set to acquire the American currency versus the Yen. As a result, the average forecast for the pair for the end of this week went up to 115.30. If reached, this level will become the highest for the cross since October 2007. As usually, the vast part of economic news will come from the United States this week, including retail sales and consumer sentiment. However, from Japanese side the traders could pay additional attention at tertiary industry activity on Wednesday and core machinery orders which will be released a day later. The current account surplus has already been published better than expected on Tuesday.
© Dukascopy Bank SA