© Dukascopy Bank SA
The Dollar/Yen currency pair traded in a mixed environment during the previous trading week, being that a neutral movement during first days was later changed by a modest downside development and then by an upward correction on Friday. The fundamental data released both in Japan and the United States drove the pair significantly. The Greenback ended the week close to seven-year peaks against the Yen on Friday, as tumbling oil prices added to concerns over the risk of deflation in Japan. The diverging monetary policy stance between the Federal Reserve and the BoJ continued to push the Yen lower. By Friday's evening the pair managed to surge up to 118.75, but closed slightly below this important level at 118.65. Japan's CPI decreased to 2.9% in October, comparing to 3.2% a month earlier. Unemployment rate in the country, in turn, decreased to 3.5%. From the American side, country's consumer confidence level reached 88.7 points in October versus 94.1 in the previous month. Meanwhile, durable goods orders rose 0.4% and production sector's PMI lowered to 58.7.
Even though sentiment among Dukascopy traders remains rather strong for this currency pair, the average expectation for the end of this week is located only marginally higher from the level seen on Friday. 71% of all votes, remain bullish on the American dollar, while 28% of Community members predict the Japanese yen to recover. This week, the possible drivers for this pair have already included the Japanese manufacturing PMI at 52 points and worse than forecasted average cash earnings. Moreover, On Monday, the Japanese monetary base has been published as well and showed a decline of 0.2% in expansion's pace, reaching 36.7% in November.
© Dukascopy Bank SA