NZDJPY slips on stronger Japanese data


The yen saw little lasting impact from data out of Japan today, USDJPY trades around 111.30, earlier it had dipped to two-session low of 111.13 following the data releases, which included the Tankan survey of businesses showing the reading for large manufacturers rising to a 1.5-year high. Japan’s final March manufacturing PMI was less encouraging, dipping to 52.4, below the flash estimate of 52.6 and the 53.3 reading seen in February. Data on Friday showed the jobless rate ebbing to a two-year low of 2.8% in February and industrial output rising more than expected, at a rate of 2.0% y/y, though headline national CPI for February fell to 0.3% from 0.4% while the core Tokyo CPI rate for March fell to -0.4% y/y, contrary to expectations for an unchanged reading of -0.3%. The soft CPI figures came despite a spike in input prices, suggesting that the consumer sector remains weak. Overall, the data shows the Japanese economy is benefiting from the global uptick in economic activity, but that the BoJ is likely to remain in wait-and-see mode with regard to withdrawing monetary stimulus. USD-JPY support is at 110.99-111.02, and resistance at 111.77-80.

Of the other JPY crosses the weak Kiwi attracted a SHORT position on the 4 hour NZDJPY chart as the pair confirmed the break of the 20 period moving average. An entry was taken this morning on the close of the latest 4 hour candle (77.86) with the target at the 14 period ATR at 77.61.  The RSI, MACD and Parabolic SAR all remain negative. The higher time frame Daily and Weekly charts are also in strong down trends. A positive break of the 20 period moving average and the recent high at 78.40 would suggest at end to the downtrend.

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Stuart Cowell

Senior Market Analyst


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