© Dukascopy Bank SA
The Dollar/Yen pair started trading on Monday at the 113.2 level, but was able to penetrate bearish momentum and advanced to 114.4 on March 2. However, the dollar continued to struggle to break the 114 resistance level as better than expected data failed to lift sentiment. Better than expected factories data along with the improved APD figures of 214,000 new staff in February, compared to the 185,000 payrolls expected by analysts, failed to lift the dollar. Moreover, on Thursday, the greenback pared its earlier moderate gains against the Japanese yen as the US macro calendar unveiled a bunch of fresh updates, namely sluggish services data in February. On Friday, in turn, the Japanese yen rose against its US counterpart after Bank of Japan Governor Haruhiko Kuroda told Japan's parliament that the central bank was not currently considering taking interest rates further into negative territory. The BoJ targets inflation of 2%, but data released a week ago revealed that the national core CPI was flat in January, while Tokyo's core CPI index fell 0.1% year-on-year in February. Kuroda likened the BoJ's negative interest rate strategy to the European Central Bank's policy, saying on Friday that the negative policy rate is aimed at pushing down real interest rates and heightening inflation expectations. Overall, the yen has had a turbulent week, with the pair swinging as low as 112.19 on Tuesday before climbing to a two-week high of 114.44 a day later.
This week's overall sentiment for the USD/JPY pair again is bullish, as 70.6% of all traders are supporting the positive case for the pair, while more than 22% of traders expect the pair to close above the 113.8 level towards the end of present working week.
© Dukascopy Bank SA