Forex Pros – The week ending March 25 saw the yen decline against the U.S. dollar for the first time in three weeks, however losses were limited amid persistent concerns over further intervention by the Bank of Japan to weaken the yen.
USD/JPY hit 81.49 on Friday, the pair’s highest since March 18; the pair subsequently consolidated at 81.31 by close of trade, slumping 0.57% over the week.
The pair is likely to find support at 80.70, Wednesday’s low and resistance at 81.98, the high of March 18.
The yen fell to a one-week low against the U.S. dollar on Friday after official data showed that fourth quarter U.S. gross domestic product came in stronger-than-expected, rising at an inflation-adjusted annual rate of 3.1%, more than the expected 2.9% gain.
Philadelphia Federal Reserve Bank President Charles Plosser said consumer spending continued to expand at a “reasonably robust pace” and the labor market was improving. The overall economy, he said, had gained “significant strength and momentum” since the summer.
Meanwhile, the Bank of Japan kept extra yen in the currency market, further supporting the currency after last week’s coordinated action by Japan and other Group of Seven nations to curb the yen’s sharp gains in the wake of the March 11 disaster.
In the week ahead the yen could gain as inflows ahead of the Japanese fiscal year-end on March 31 pick up. Japanese exporters usually sell the dollar ahead of the financial year. Meanwhile, the U.S. is to release key data on nonfarm payrolls as well as a closely-watched report on its unemployment rate.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday
The U.S. is to kick off the week by releasing a flurry of data, with an industry report on pending home sales as well as official data on personal spending, personal income and personal consumption expenditures.
Meanwhile, Japan is to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity as well as data on household spending and a report on its unemployment rate.
Tuesday
The U.S. is to publish data on consumer confidence compiled by the Conference Board as well as industry data on house prices, a leading indicator of the housing industry’s health.
Later in the day, Japan is to produce preliminary data on industrial production, a leading indicator of economic health.
Wednesday
The U.S. is to publish data on private sector payrolls compiled by payroll processing firm ADP, which heads up government data by two days, as well as a report on crude oil stockpiles.
Meanwhile, Japan is to produce data on manufacturing activity.
Thursday
The U.S. is to release its key weekly report on initial jobless claims, a leading indicator of overall economic health. The country is also to publish a report on manufacturing activity in the in the Chicago area as well as official data on factory orders and natural gas inventories.
Japan is to publish government data on average cash earnings and housing starts. Later in the day, the country is to publish its Tankan manufacturing and non-manufacturing indexes, leading indicators of economic health and the tertiary industry activity index.
Friday
The U.S. is to round up the week with a string of data, including a closely watched report on non-farm payrolls, a leading indicator of job creation. The country is also to publish government data on the rate of unemployment and average hourly earnings.
In addition, the country is to release official data on construction spending and total vehicle sales, while the Institute for Supply Management is to publish a report on manufacturing activity.
ForexPros.com
