USDJPY – Can US Dollar Recover Vs Japanese Yen?

Key Highlights

  • The US Dollar suffered losses against the Japanese yen during the past few days and traded below 113.00.
  • There are a couple of bearish trend lines on the 4-hours chart of USDJPY, which may act as a resistance on the upside near 113.00 and 113.90.
  • Today, the Japanese Current Account released by the Ministry of Finance posted a trade surplus of ¥1,112.2B in Dec 2016, compared with the ¥1,294.5B forecast.
  • The Japan Bank lending, released by Bank of Japan posted an increase of 2.5% in Jan 2017, compared with the +2.7% forecast.

USDJPY Technical Analysis

The US dollar faced a lot of selling pressure lately against the Japanese yen, and declined below 113.00. The USDJPY pair is currently recovering from 111.60, but may find resistance on the upside.

USDJPY Technical Analysis US Dollar Japanese Yen

The pair is currently facing resistance near the 23.6% Fib retracement level of the decline from the 115.37 high to 111.59 low at 112.60. The same level also represents the last swing low. So, it is likely to act as a hurdle for further upsides.

There are also a couple of bearish trend lines on the 4-hours chart. They might act as a resistance near 113.00 and 113.90 if the pair continues to move higher. Overall, it looks like a recovery won’t be easy in USDJPY in the near term.

Japanese Current Account

Today, the Japanese Current Account figure for Dec 2016 was released by the Ministry of Finance. The market was aligned for the net flow of current transactions, including goods, services, and interest payments to post a surplus of ¥1,294.5B.

However, the trade surplus was ¥1,112.2B in Dec 2016. On the other hand, the Trade Balance posted a positive and more than expected trade surplus of ¥806.8B in Dec 2016 (BOP Basis).

Japan Bank Lending

The Japanese Bank lending, which is the value of all outstanding loans with Japanese banks was released by Bank of Japan. The forecast was slated for an increase of 2.7% in Jan 2017, compared with the same month a year ago.

However, the result was on the lower side, as the rise was 2.5%. Overall, there is hardly any reason for the Japanese to trim its gains against the US Dollar. So, the USDJPY pair is likely to remain under a bearish pressure.