The greenback remained range-bound against the yen yesterday following the release of weak economic data from both the US and Japan. While Japan’s consumer price index data for November missed estimates, the US job openings (JOLTS) data disappointed the market. Overall, the USD/JPY pair traded in a range of between 146.57 and 147.45 in the past 24 hours.
According to Japan’s Statistics Bureau, Tokyo’s core consumer price inflation, which excludes volatile goods such as fresh food but includes fuel prices, rose by 2.30% y-o-y in November following a 2.70% rise in the previous month and was a notch lower than forecasts of 2.40% growth. The reported figure reflects an easing of inflationary pressure in the country.
Service prices grew by 3% y-o-y in November 2023, reflecting the quickest rate of growth since 1994. As the third-largest economy’s inflation has remained above 2% for over a year, several market participants anticipate the bank will roll back its huge stimulus program next year.
The Job Openings and Labor Turnover Survey (JOLTS) data published by the US Bureau of Labor Statistics indicated that the number of job openings decreased to 8.73 million in October from 9.55 million in September and missed forecasts of 9.31 million openings. Correspondingly, the job opening rate fell by 0.30% m-o-m to 5.30% in October.
Job openings in the health care and social assistance sectors declined by 236,000. Likewise, the finance and insurance sectors recorded a decrease of 168,000. Also, the real estate, rental, and leasing sectors posted a drop of 49,000. On the contrary, job openings rose by 39,000 in the information sector.
According to the data published by the US Institute for Supply Management, the country’s purchasing managers’ index improved to 52.70 in November from 51.80 in October and surpassed forecasts of 52.20. The reported figure reflects 11th successive months of monthly growth. Furthermore, the sector has recorded expansion in 41 out of the past 42 months (excluding contraction in December 2022).
The business activity index inched up by 1% to 55.10 in November from 54.10 in October. The new orders index stood unchanged at 55.50 in November. The supplier deliveries index increased to 49.60 from 47.50. The inventories index grew to 55.40 from 49.50.
The weak economic data from both countries is expected to keep the USD/JPY pair range-bound in the near term.
Technically, the USD/JPY pair is declining after breaking the support at 148.40. The next major support is anticipated to be near 145.25. Additionally, the currency pair is trading below its 50-day moving average, while the stochastic indicator is in the bearish zone. Therefore, we anticipate the USD/JPY pair to remain in a downtrend in the near term.
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.
