© Dukascopy Bank SA
During April 4-8 trading week, the USD/JPY currency cross performed in a strong bearish trend, as the pair lost around 400 pips in five working days and crossed a number of considerable support levels being driven by negative American statistical data. The dollar lost pace against the Yen on Tuesday after Japanese wage data came in much better than analysts expected, suggesting the Bank of Japan's scheme to lift wages and boost inflation might be starting to pay off. Cash earnings surged 0.9% year-on-year in February, according to Japan's Ministry of Health, Labor and Welfare, far outpacing the 0.2% rise in earnings forecast by analysts. By the end of the week, the Japanese yen rose to a fresh October-2014 high against the US dollar on Monday, in what one expert says is due to a surge in speculative long positions. By the end of the week, the yen has strengthened very notably, which is causing concerns of a possible Bank of Japan intervention, although this has not stopped the yen's rally recently. Therefore, from Monday's mark of 111.7 the USD/JPY currency pair slid down to 107.6, just above the weekly S2. Dukascopy traders, in turn, predicted pure bearish trend for the pair.
However, some traders, still forecast a bullish trend, namely Jignesh said "Last week Thursday, we saw a significant decline in the XXX/JPY. CFTC positioning for the JPY had given us a warning of such move to come. With several pairs down 2% or more in the single day, it is likely the end of last week saw some profit taking and traders looking to reenter from higher prices. Thus expecting a pull back this week. As well major support for USDJPY comes in about 100 pips from the weekly close, limiting the downside for the week."
This week will be rich on US data, including report on initial jobless claims on Thursday, as well as industrial production on Friday.
© Dukascopy Bank SA