© Dukascopy Bank SA
The third most popular currency pair on the foreign exchange market gained considerable value during the last trading week. The USD/JPY cross opened the previous week at the 117.29 level and was broadly influenced by news from Japan, US and Australia. Meanwhile, sentiment on the Dollar remained vulnerable, after data on Monday showed that US consumer spending fell at the fastest rate since September 2009 in December, dropping 0.3% on cheaper gasoline prices. On Tuesday, the pair was pushed lower after disappointing US factory orders data, which added to Monday's weak US economic reports, erasing optimism over the strength of the country's recovery. Meanwhile in Japan, December labour cash earnings rose 1.6%, meeting expectations and clocking a tenth straight gain. However, Japan's index of leading economic indicators increased less-than-expected in January. The index climbed to seasonally adjusted 105.2 points, down from 103.9 in the preceding month, while analysts had expected index to advance 105.5 last month. Nevertheless, the Yen surged versus the US Dollar at the end of last week and the pair ended the trading week at 119.18 level.
Compared to the previous week the bullish sentiment gained even more strength, as 66% of all votes are now bullish. However, the average forecast for the pair for the end of this week went down to 117.9. As usually, the vast part of economic news will come from the United States this week, including retail sales and initial jobless claims on Thursday. However, from the Japanese side traders could pay additional attention to machinery orders on Wednesday and foreign bond investment which will be released a day later. The tertiary industry index has already been published on Tuesday and did not reach the expectations of 0.1%, falling by 0.3%.
© Dukascopy Bank SA