STRONG DATA FROM JAPAN PULLS USD/JPY DOWN
Mostly positive data from Japan resulted in the fall of USD/JPY. Yesterday evening we had a big block of important statistics from Japan published. The main headlines were the decline in household spending in May was only 0.1% compared to the forecasted 0.7%, the national core consumer price index increased to 0.4% that met expectations but still is below the target level of the Bank of Japan at 2.0%.
Industrial production in the third largest economy in the world declined by 3.3% in May comparing to April but for on an annualized basis accelerated to 6.8%. The reduction in industrial production during May is explained by the holiday week at the beginning of the month. Among negative news, the growth of the unemployment rate to 3.1%, was 0.3% worse than forecasted.
Currently the quotes are near the strong support at 111.70 and the lower limit of the rising channel and breaking through them may become the trigger for the trend change to negative. In which case the closest targets will be 110.90 and 109.60. We do not exclude a resumption in growth within the channel with the first target at 113.10. Upcoming US statistics we should pay attention to are personal income and spending at 12:30 GMT and consumer sentiment at 14:00 GMT.