USD/JPY posted sharp gains last week, surging 370 points. The pair closed at 111.76, its highest weekly gain since late March. There are six events on the calendar this week. Here is an outlook on the major events moving the yen and an updated technical analysis for USD/JPY.
The oil summit in Qatar, which failed to produce an agreement, resulted in volatility for the Japanese yen. The currency initially gained ground after the inconclusive meeting but lost ground as oil prices stabilized. In the US, jobless claims sparkled, but manufacturing and housing reports missed expectations.
- SPPI: Sunday, 23:50. This inflation index has been steady, posting two straight readings of 0.2%. An identical reading is expected in the March release.
- All Industries Activities: Wednesday, 4:30. After posting two declines, the indicator rebounded in February with a strong gain of 2.0%, within expectations. The markets are braced for a sharp downturn, with an estimate of -1.3%.
- Household Spending: Wednesday, 23:30. Consumer spending is a key engine of economic growth and is closely monitored by analysts. The indicator rebounded in February with a strong gain of 1.2%, breaking a nasty streak of five consecutive declines. The markets are bracing for a downturn in March, with an estimate of -4.0%.
- Tokyo Core CPI: Wednesday, 23:30. Inflation levels remain low, and this key inflation indicator has posted three straight declines. Another soft reading is expected in April, with an estimate of -0.3%.
- Retail Sales: Wednesday, 23:50. Retail Sales is the primary gauge of consumer spending, and an unexpected reading could have a strong impact on the movement of USD/JPY. The indicator posted a gain of 0.5% in February, below expectations. The markets are expecting a sharp downturn in the March report, with the estimate standing at -1.4%.
- Monetary Policy Statement: Thursday, Tentative. The BoJ has been under pressure to take monetary steps to bolster the economy, and interest rates cuts is one option available to the BoJ. As well, the BoJ will release a quarterly outlook report which discusses economic conditions and the inflation picture.
* All times are GMT