Japanese Yen gets help from easing US data while Yen tries to start its recovery – Crypto News

• The Japanese Yen slightly recovers from its multi-decade low of 160.87 against the US Dollar seen on Wednesday.
• The Yen finds some support after comments from Japanese Finance Minister Shun’ichi Suzuki. 
• The US Dollar Index falls back below 106.00 ahead of US Q1 GDP, Durable Goods Orders and weekly Jobless Claims. 

The Japanese Yen (JPY) is attempting to starts its recovery after its steep decline Wednesday when markets started playing a chicken game with the Japanese government. The Japanese Yen sank to 160.87 against the US Dollar (USD), even lower than the level of 160.20 seen at the end of April right before the Japanese Ministry of Finance intervened and pushed the USD/JPY back to 151.95. Early comments during the Asian session on Thursday from Japanese Finance Minister Shun’ichi Suzuki seemingly had more impact than the comments from Masato Kanda, Vice Minister for International Affairs, on Wednesday when the actual move occurred. 

Meanwhile, the US Dollar Index (DXY) – which gauges the value of the US Dollar against a basket of six foreign currencies – is easing after the chunky US data release on Thursday made markets choke. Certainly the nearly flatlining US Durable Goods orders and the uptick in Wholesale Inventories is another sign on the wall the US consumer is not having it anymore. That could have ripple effect over the summer in employment data and economic performances, no longer support a US Dollar at current levels, but lower. 

Daily digest market movers: US data helps out

• At 01:30 GMT, Japanese Finance Minister Shun’ichi Suzuki commented on the recent moves in the Japanese Yen. Suzuki said they are watching currencies closely and will act when needed, though Suzuki declined to comment on specific FX levels.
• Reuters cites severals banks which got consulted by the Bank of Japan during European hours, asked for their expectations over the range and pace of tapering. The survey will certainly be used in the upcoming meeting with the BoJ and bond market participants on July 9th and 10th.  
• At 12:30 GMT, nearly all important data points were released for this Thursday:
  • US Gross Domestic Product for the third quarter:
    • Headline GDP grew at an annualized rate of 1.4%, more than the 1.3% previously estimated.
    • GDP Price Index remained stable at 3.1%.
    • The Headline Personal Consumption Expenditure  Price index went from 3.3% to 3.4%, while the core reading also ticked higher from 3.6% to 3.7%.
  • US Durable Goods for May:
    • Headline Durable Goods orders fell flat to 0.1%, from a revised 0.6% to only 0.2%.
    • Durable Goods without Cars and Transportation missed estimates and fell lower from 0.4% to -0.1%.
  • Weekly Jobless Claims for the week ending June 14th:
    • Initial Jobless Claims came in stronger, from 238,000 to 233,000..
    • Continuing Claims were an issue, as they jumped from 1,821,000 to 1,839,000.
• Equities are trying to digest the US data release with US equities trying to salvage the situation and erasing earlier losses partially. 
• The CME Fedwatch Tool is broadly backing a rate cut in September despite recent comments from Federal Reserve (Fed) officials. The odds now stand at 56.3% for a 25-basis-point cut. A rate pause stands at a 37.7% chance, while a 50-basis-point rate cut has a slim 6.0% possibility. 
• The Overnight indexed Swap curve for Japan shows a 64.0% chance of a rate hike on July 31, and a smaller 52.8% chance for a hike on September 20. 
• The US 10-year benchmark rate tradesat 4.29%, easing a touch. 
• The benchmark 10-year Japan Treasury Note (JGB) trades around 1.07%, nearing highs not seen since 2011.

USD/JPY Technical Analysis: Interventions from both sides? 

The USD/JPY is trading off its multi-decade high, freshly printed on Wednesday at 160.81. For now, the words from Japanese Finance Minister Shun’ichi Suzuki are having a bit of an impact, though the question is how long the impact will last as the attention will start to die down. The Japanese government is playing a dangerous game, though, seeming to bet on weak US data on Thursday and Friday, which would trigger a pullback in the DXY and might see Yen strengthen without aid from the Japanese government. 

Although the Relative Strength Index (RSI) is overbought in the daily chart, a correction could soon occur. If weaker US data, when that plays out and is undoubtedly not a certainty, will be enough to drive USD/JPY down to 151.91 remains to be seen. Instead, look at the 55-day Simple Moving Average (SMA) at 156.39 and the 100-day SMA at 153.69 for traders to quickly build a pivot on and try to test highs again, testing the Japanese deep pockets again. 

USD/JPY: Daily Chart