The US dollar rallied against the yen yesterday following the release of better-than-anticipated US consumer confidence data for September and an unexpected rise in new home sales in August. Japan’s Services Producer Price Index (SPPI) data for August missed estimates. Overall, the USD/JPY pair rallied from a low of 143.60 to a high of 144.80 in the past 24 hours.
Japan’s Services Producer Price Index (all items) rose by 1.9% y-o-y in August, following a 2% rise in the previous month, but missed the 2.40% growth anticipated by economists. Excluding transportation, the country’s SPPI grew by 1.50% in August, following a 1.30% increase in July.
Advertising services recorded a growth of 1.80% y-o-y in August, following a rise of 5% in July. Transportation and postal activities posted an increase of 4.10%, compared with 4.80%. However, information and communications contracted 0.10%, following a decline of 0.30%. Finance and insurance recorded an increase of 2.70% in August, following a 1.80% rise in the earlier month. Likewise, leasing and rentals inched up 4.60%, compared with 4.30% in July.
As per the US Census Bureau, the country’s durable goods orders contracted 0.20% month-over-month in August, succeeding a decline of 0.1% in the previous month, and missed the 0.10% growth anticipated by economists.
The drop was led by transportation equipment, on a dip of 1.10% m-o-m in August. Specifically, non-defense aircraft and parts recorded a decline of 18.50%.
While fabricated metal products fell by 0.70%, non-defense capital goods decreased by 2.70%. On the contrary, defense aircraft and parts posted an increase of 31.20%. Also, defense capital goods saw a rise of 10.10%. Electrical equipment and appliances posted a decline of 1%, while computers and electronics recorded a drop of 0.80%. Primary metals reported an increase of 0.40%. Orders for non-defense capital goods, devoid of aircraft, surged 1.30%, considerably higher than 0.70% in July and surpassing forecasts of a 0.20% increase.
According to the Federal Housing Finance Agency, the US House Price Index (HPI) fell by 0.60% m-o-m in July, following a 0.10% rise in the preceding month. Economists did not anticipate any change in the reading for the reported period.
On a year-over-year basis, house prices surged 13.90% in July 2022. The S&P CoreLogic Case-Shiller US National Home Price NSA Index, encompassing all nine divisions, posted an increase of 15.80% y-o-y in July, compared with an 18.10% rise in June.
The 10-City Composite increased by 14.90% y-o-y in July, following a rise of 17.40% in June. The 20-City Composite grew by 16.10% y-o-y in July, compared with an increase of 18.70% in June, but missed forecasts for a rise of 17.10%.
The Conference Board Consumer Confidence Index rose to 108 in September, from 103.60 in August, and surpassed the reading of 104 anticipated by economists. The reported reading reflects the second successive monthly rise.
The Present Situation Index grew to 149.60 in September, from 145.30 in August. Also, the Expectations Index increased to 80.30, from 75.80.
In a separate news release, the Census Bureau stated that the country’s new home sales surged to 685,000 units in August, from 532,000 units (upwardly amended from 511,000 units) in July, and delighted the market, which was expecting a decline in new home sales to 500,000 units. The reported figure, however, is 0.10% below the 686,000 units reported for August 2021.
The mixed economic data from the US and the Fed’s hawkish stance are predicted to keep the dollar range-bound with a slight bullish bias in the near term.
Technically, the USD/JPY pair has bounced off the support at 143.60. The following resistance is expected near 145.90. Also, the currency pair is trading above its 50-day moving average while the stochastics indicator is in the bullish zone. We anticipate the currency pair to stay in an uptrend in the coming days.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
