Yesterday’s trade saw USD/JPY within the range of 120.24-120.78. The pair closed at 120.50, losing 0.16% on a daily basis.
At 13:06 GMT today USD/JPY was up 0.03% for the day to trade at 120.48, which is also the pairs current daily high.
Fundamentals
Japan
Consumer inflation
Annualized consumer inflation in Japan probably remained steady at 2.9% in November, according to the median forecast by experts. If so, this would be the lowest inflation rate since March, when the annualized Consumer Price Index (CPI) rose 1.9%. In September annual inflation was reported at 3.2%. In October the largest annual price increases were reported for fuel, light and water (+4.8%), culture and recreation (+4.6%), furniture and household utensils (+3.9%), food (+3.8%), transportation and communication (+3.2%) and clothes and footwear (+3.1%).
Annualized core consumer inflation, which does not take into account price changes of fresh food, probably decelerated to 2.7% in November from 2.9% in the prior month. If so, this would be the lowest core inflation level since March, when the Core CPI increased 1.3%. In September annual core inflation was reported at 3.0%.
In case the general annualized CPI or the core CPI decelerated more than expected, this would have a bearish effect on the Japanese yen. The Statistics Bureau of Japan is to release the official CPI data at 23:30 GMT.
Industrial output
Japanese industrial production probably grew at a pace of 0.8% in November compared to October, according to market expectations, following a 0.4% gain in October and 2.9% gain in September. The latter has been the most considerable monthly rate of increase since January, when output expanded at a pace of 3.9%.
The nations annualized industrial production shrank 0.8% in October, neutralizing the 0.8% gain, reported in September.
In case the index of industrial output showed a larger-than-projected increase in November, this would provide support to the local currency, as this implies a stronger economic growth and a probable inflation boost. Japans Ministry of Economy Trade & Industry is expected to publish the official industrial data at 23:50 GMT.
Retail sales
At the same hour market players expect the release of the Japanese retail sales report. Annualized retail sales probably rose 1.1% in November, following another 1.4% gain in the preceding month. If so, this would be the fifth consecutive period of growth in sales. This indicator suggests how strong consumer spending in the country is, while the latter provides clues over economic growth resilience. Therefore, higher rates of increase in annual retail sales tend to support demand for the yen.
Pivot Points
According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 120.51. In case USD/JPY manages to breach the first resistance level at 120.77, it will probably continue up to test 121.05. In case the second key resistance is broken, the pair will probably attempt to advance to 121.31.
If USD/JPY manages to breach the first key support at 120.23, it will probably continue to slide and test 119.97. With this second key support broken, the movement to the downside will probably continue to 119.69.
The mid-Pivot levels for today are as follows: M1 – 119.83, M2 – 120.10, M3 – 120.37, M4 – 120.64, M5 – 120.91, M6 – 121.18.
In weekly terms, the central pivot point is at 118.23. The three key resistance levels are as follows: R1 – 120.91, R2 – 122.31, R3 – 124.99. The three key support levels are: S1 – 116.83, S2 – 114.15, S3 – 112.75.
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