© Dukascopy bank SA
The USD/JPY pair was trading in a calm manner, without major spikes or falls last week. The pair opened a new week on a rather negative note at 118.61 level; however, it started to increase in value gradually. In Japan, Monday data showed the country's economy returned to growth in the final quarter of 2014, but GDP advance used to be weaker than expected, indicating that recovery remains fragile. The Japanese Yen gained, after the BoJ held its monetary policy steady on Wednesday and markets in Asia prepared for the Chinese New Year holidays. On Thursday, the Yen was remaining strong on better than expected export figures and a mildly dovish Federal Reserve minutes release. Japanese exports surged in January due to strong demand from Asia and US, providing evidence that the world's third largest economy is exiting recession. Exports rose by 17% on a yearly basis last month, exceeding the forecasts of 13.5%. However, the currency was slightly weaker in early Asian trade on Friday despite no major data releases and since many markets were shut for the Lunar New Year holidays. The pair ended trading at 118.87 level on February 20.
Compared to the previous week, sentiment became completely equal on USD/JPY cross with both long and short expectations divided 50/50 between traders. The average for the pair is currently staying around 119 level. On Wednesday, the US is to release data on new home sales, while the CPI and reports on initial jobless claims and durable goods orders will all be published a day later. From Japanese side, traders could pay attention to the National CPI, unemployment rate and industrial production numbers on Thursday. Retail trade and jobs applicant ratios are expected to be announced the same day. The US is to round up the week with revised data on fourth quarter growth and pending home sales.
© Dukascopy bank SA