US wholesale inventories rose more than expected in October, which is likely to result in a boost to the fourth quarter GDP numbers. The Commerce Department reported wholesale stocks increased 0.4%, while September's wholesale inventories were revised up to show a 0.4% rise.
Meanwhile, Japan's economy contracted more than previously estimated, giving the government more reasons to proceed with the plan to delay the next sales tax hike and hold an early election. The nation's economy shrank 1.9% in annual terms in the third quarter, according to revised data, which underlined that the hit from April's sales tax increase turned out to be more devastating than expected. On a quarter-to-quarter basis, the Japanese economy contracted 0.5% in the July-September period, compared with a preliminary estimate of a 0.4% slowdown. The world's third-largest economy technically remains in recession, marked by two quarters in a row of GDP contraction.
US crude oil inventories to be released
US crude oil inventories are released today, it is very important to pay attention to what is going on in US oil market, since crude has been one of the key drivers in the global markets. Moreover, in the night to Thursday Japan's core machinery orders and tertiary industry activity data will be released.USD/JPY continues to reach new highs
At the first half of the year USD/JPY was trading almost completely flat, as it traded around the 102 level. However, at the second part of August the Greenback started to outperform the Japanese peer rather heavily. Currently, the pair has breached the 120 mark and for the time being it is supported by the support line and monthly R1 near the 121 mark, if this level holds then we might see the pair climbing even higher. Nonetheless, in case these levels do not hold the selling pressure then the pair is likely to slide below the psychological level of 120.Daily chart
USD/JPY has rebounded from the steep drop yesterday, when the weekly S1 at 119.05 was breached. Nonetheless, even though this level was broken yesterday it still remains a support level as of today. Moreover, the technical studies have become more bullish compared to day earlier, as the daily technical indicators are giving 'buy' signals, after being neutral yesterday.
Hourly chart