USD/JPY: Japan’s manufacturing activity hit highest level in almost 4 years in January

USD/JPY: Japan’s manufacturing activity hit highest level in almost 4 years in January


USDJPY Movement

For the 24 hours to 23:00 GMT, the USD declined 0.6% against the JPY and closed at 110.28.

In the Asian session, at GMT0400, the pair is trading at 109.95, with the USD trading 0.3% lower against the JPY from yesterday’s close.

The Japanese Yen climbed against the USD, following strong manufacturing sector report in Japan.

Data revealed that Japan’s preliminary Nikkei manufacturing PMI climbed to a level of 54.4 in January, notching its highest level since February 2014 and pointing to a strong economic activity in the new year. The PMI had recorded a reading of 54.0 in the previous month.

On the other hand, the nation’s adjusted merchandise trade surplus narrowed more-than-anticipated to ¥86.8 billion in December, after recording a surplus of ¥364.1 billion in the previous month. Markets were anticipating the country’s adjusted merchandise trade surplus to drop to ¥276.7 billion.

Other data showed that the nation’s exports advanced 9.3% on an annual basis in December, missing market expectations for a gain of 10.0%. In the previous month, exports had risen 16.2%. Also, the nation’s imports climbed 14.9% YoY in December, higher than market estimates for a rise of 12.4%. Imports had advanced 17.2% in the previous month.

Early morning data revealed that Japan’s final leading economic index climbed to a level of 108.3 in November, while the preliminary print had indicated a rise to a level of 108.6. The index had registered a level of 106.5 in the previous month. Additionally, the nation’s final coincident index was revised lower to a level of 117.9 in November, compared to a level of 116.4 in the prior month. The preliminary figures had recorded a rise to 118.1.

The pair is expected to find support at 109.49, and a fall through could take it to the next support level of 109.04. The pair is expected to find its first resistance at 110.79, and a rise through could take it to the next resistance level of 111.64.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

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