© Dukascopy Bank SA
The Dollar/Yen cross was pretty much unchanged during first days of the previous week, while major changes took place on Friday, when the pair climbed above the 121 mark, its highest level since July 2007. On that day, it was announced that the US economy added 321,000 jobs in November, the fastest rate in nearly three years, underlining the inevitable future divergence in monetary policy actions between the Federal Reserve and the Bank of Japan. The strong jobs' report prompted markets to bring forward the average expectations for the first hike in US interest rates to mid-2015 from September 2015. In contrast, the BoJ has unexpectedly expanded its stimulus program in late October and is likely to hold its dovish stance for a long period of time. The Yen remained weaker after opinion polls in Japan reported that Prime Minister Shinzo Abe's coalition government could retain its majority in the lower house of parliament after the election, which will take place on December 14.
This week the overall sentiment for the USD/JPY pair changed completely to the opposite side, comparing to the previous week, as 57.9% of all traders are now supporting bearish case for the US Dollar. Slightly more than 21% of traders expect the pair to close above the 120.1 level in the end of the present working week. This Monday, machine tool orders soared 36.6%. Concerning other fundamentals from Japan, the machinery orders and tertiary industry activity are due to be released on Wednesday. From the US side, traders could pay attention to initial jobless claims, retail sales and business inventories on Wednesday, followed by statistics on producer prices, which will be announced a day later.
© Dukascopy Bank SA