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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, reflecting strength of the US dollar due to strong performance of the world's largest economy. The Greenback rose to one-week highs against the Yen on Monday, as sentiment for the American currency remained broadly supported by expectations for a US rate hike next year. Besides that, concerns over the recent drop in oil prices are beginning to ease. However, the Yen has also started to advance after the Bank of Japan's Monthly economic report, which showed that the country's economy has continued to recover moderately and effects from the decline in aggregate demand, which followed the sales tax's hike, have been subsiding. Nevertheless, on Tuesday the pair hit the 120.19 level, the highest since December 9, as data showed the US economy grew faster than expected by 5% last quarter. Meanwhile, Japanese core CPI rose 2.7% in November from a year earlier, versus a 2.9% increase in October, while the industrial production shrank 0.6%. Moreover, the BoJ is boosting the monetary base at an annual pace of 80 trillion Yen, as it seeks to spur a recovery, as the economy continue to generate weak growth numbers.
Market sentiment on the present currency cross changed just a little from the previous trading week, as now around 83% of Dukascopy Community members suggest that Dollar will continue appreciating versus the Japanese yen. In addition to that, traders think that the pair will consolidate in its value to reach the 120.5 level by the end of this week on January 2, 2015. Among important news from the American side, consumer confidence index will be announced on Tuesday, followed by the ISM Manufacturing PMI on Friday.
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