The new month of September kicks off with a slow start, as the US markets are closed for the Labor Day holiday. The US dollar made the most of Monday’s Asian session and has posted strong gains, climbing close to one cent against the Japanese yen. USD/JPY is trading in the low-99 range in the European session. On Friday, UoM Consumer Sentiment fell, but still beat the estimate. In Japan, Capital Spending stopped a streak of two straight declines. There are no US releases on Monday.
The markets were unsteady last week in anticipation of an expected US military strike against Syria, after a chemical attack in the war-torn country killed hundreds. The euro dropped sharply, losing about 170 points last week. However, the attempt by the US to secure a coalition round into trouble, and President Obama said on the weekend that he will seek Congressional approval before taking any action against Syria. With Congress in recess until September 9th, a military strike could be delayed until mid-September or even later. The markets have now settled down and the euro is trading quietly as we begin a new week.
Over in Japan, Capital Spending, which is released on a quarterly basis, was up sharply.. The indicator climbed from -3.9% in Q1 to a flat 0.0% in Q2. The estimate stood at -2.0%. This marks the first time that the indicator has beaten the forecast since Q1 of 2012. The Japanese economy is showing signs of improvement, but business and consumer spending releases will have to point upwards if the economy is to recover from years of stagnation.
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USD/JPY September 2 at 11:25 GMT
USD/JPY 99.28 H: 99.42 L: 98.35
- USD/JPY is up sharply in Monday trading. The pair posted modest gains in the Asian session and jumped sharply in European trading, crossing above the 99 line.
- The pair is facing resistance at 99.45. This is a weak line and could be tested if the yen continues to slump. There is stronger resistance at the critical number of 100.
- On the downside, USD/JPY is receiving support at 98.43. This line has strengthened as the pair trades at higher levels. This is followed by support at 97.83.
- Current range: 98.43 to 99.45
- Below: 98.43, 97.83, 97.18, 96.20, 95.60 and 94.29
- Above: 99.45, 100.00, 100.85 and 101.66
USD/JPY ratio is unchanged in Monday trading. This is reflected in the current movement of USD/JPY, as the pair is showing little movement. The ratio continues to have a strong majority of long positions, indicative of strong trader bias towards the dollar continuing to push to higher ground.
USD/JPY has jumped higher, pushing above the 99 line. With the US markets closed for the Labor Day holiday we can expect the pair continue to trade quietly during the day.
USD/JPY Fundamentals
- 23:50 Japanese Capital Spending. Estimate -2.0%. Actual 0.0%.