Technical analysis and trading recommendations - https://fxpcm.com/en/fx/usd-jpy-pair-has-stabilized-near-level-10970-27052016
According to the presented today at the beginning of the Asian session data, the national consumer price index (CPI) Japan fell in April by 0.3% on an annualized basis, the consumer price index (CPI) in the Tokyo area fell by 0.5% yoy in May.
In response, the yen fell in tandem with the US dollar.
Along with the weakening of the yen showed a small increase in the Japanese stock market. However, by the early European session, USD / JPY has returned to the level of opening of the trading day near the mark of 109.70. Investors take profits on long positions on the dollar after yesterday's controversial macroeconomic data for the US and before an important speech Fed Chairman Janet Yellen at Harvard University.
Speech is scheduled for today at 17:15 (GMT) and it is expected to market participants, D.Yellen clarify the Fed's stance on further interest rate rises.
The US dollar strengthened in May as a whole by 2.8% after some Fed officials signaled that the central bank may raise interest rates at its meeting in June. As mentioned in the CME Group, futures on interest rates indicated in the beginning of the month, only 4% chance of the Fed raising interest rates in June. Yesterday, this probability is estimated at 26% against 34% the previous day.
D.Yellen refers to low profile supporters about the pace of interest rate rises in the United States. If her speech is not contained signals for an early increase in interest rates, the US dollar can significantly weaken the position of the foreign exchange market.
In this case, investors will expect next week when on Friday will be published a report on US employment in May. When reporting on the weak dollar NFPR can dramatically decrease the market and vice versa.
Another presentation D.Yellen scheduled for June 6th. If after all the above three important events in the US dollar will continue to rise, the USD / JPY pair may break the resistance zone near the levels of 110.20, 110.80 and continue to grow to the levels of 112.00, 113.65.
Meanwhile, Japanese Prime Minister Shinzo Abe yesterday responded negatively about the state of the world economy, warning about the risk of the economic crisis, hinting thus on the possible continuation of the policy to stimulate the Japanese economy and the desire to stop the growth of the Japanese yen.