Japanese Yen Analysis 28-06-2019

The US dollar fluctuated in a tight range slipping into the US session to see its rebound for the second consecutive session from its highest since June 19, while it is still in weekly gains and the second consecutive monthly loss against the Japanese Yen following developments and economic data that followed it. The Japanese economy and coincided with the events of the G20 summit in Osaka, Japan, and on the eve of developments and economic data expected Friday by the US economy, the largest economy in the world.

At 0620 GMT, the pair dropped 0.09% to 107.69, compared to the opening levels at 107.79 after reaching the lowest level at 107.56, while the highest at 107.84.

We followed the Japanese economy, the world's third-largest economy, to reveal inflation data with the Tokyo CPI reading, which showed a stable 1.1% growth, unchanged from May, in contrast to expectations for a 1.0% contraction in growth. The substantial annual reading of the index itself, excluding fresh food, showed a slowdown in growth to 0.9% from 1.1%, worse than expectations of 1.0%.

In the same context, the Tokyo Core CPI, excluding fresh food and energy, showed a stable 0.8% growth, unchanged from May, as opposed to expectations of 0.8%. This coincided with the release of labor market data which reflected the stability of unemployment rates At 2.4% in line with expectations, little changed from last April.

To an initial reading of industrial production for the world's third-largest industrialized nation, which showed growth accelerated to 2.3% from 0.6% in April, beating expectations of a 0.7% growth rate. Versus 1.1% in the previous April reading, also outperforming expectations of a 2.9% expansion.

In addition, investors are eyeing the G20 summit in Japan as markets look forward to a meeting between US President Donald Trump and his Chinese counterpart, Shi Jinping, on Saturday, amid investors' pricing of opportunities to resolve trade disputes between the two biggest economies in the world. And Beijing last month to raise tariffs on each other's goods to 25% of 10%.

On the other hand, investors are currently looking for the US economy to reveal their spending and personal income data, which may reflect a faster growth in personal spending to 0.5% from 0.3% in April, and personal income growth slowing to 0.3% from 0.5% in April, while The reading of the Core Personal Consumption Expenditures Index may show stability at 0.2% in May, little changed from April.

This comes ahead of the Chicago PMI reading, which may reflect a narrowing to 54.0 versus 54.2 last May and before the final reading of the University of Michigan Consumer Confidence Index, which may reflect a contraction of 97.4 as compared to the initial reading For June at 97.9 and against 100.0 in May.

Technical Analysis

The USD / JPY pair rebounded after testing the resistance of the descending channel yesterday, breaking the 107.80 level and stabilizing below it, which supports our continued bearish outlook for the short and medium term, and the path is open to achieving our first target at 106.75.

We note that breaking the target will push the price to 106.00 as the next target, while the expected drop will remain intact unless the 108.15 level is breached and stability above it.

The trading range for today is expected among the support at 106.75 and the resistance at 108.15

The general trend for today is bearish