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The US is releasing its PPI report today!
Will the release help extend USD/JPY’s weeks-long downtrend?
Before moving on, ICYMI, yesterday’s watchlist looked at GBP/USD for trend continuation opportunities as markets priced in economic reopening themes from China. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. labor market still tight despite continuing claims hitting 10-month high
NZ manufacturing sales improve from -3.2% to 5.1% q/q in Q3 2022
NZ credit card spending up by 0.3% from October to November as consumers spend more on essentials
China’s producer prices dropped by another 1.3% y/y in November on COVID curbs and falling commodity prices
China’s inflation eased from 2.1% to 1.6% y/y in November, the lowest rate since March
Asian shares higher as dollar retreats, risk events abound
Dollar slips on recession fears; eyes on U.S. CPI, next week’s central bank bank meetings
Oil bounces on pipeline shutdown, but heads for weekly loss on demand woes
US PPI reports at 1:30 pm GMT
US preliminary UoM inflation expectations at 3:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! ? ?️
What to Watch: USD/JPY
USD/JPY 1-hour Forex Chart
In case you missed it, the U.S. dollar has been taking hits across the board thanks to reopening headlines in China and news that major central banks around the world are taking a chill pill with their interest rate hikes.
The anti-dollar sentiment gained momentum for USD/JPY some time in late October after the pair found resistance at the 152.00 mark.
USD/JPY even dipped to its 133.75 December lows before pulling back up to the 136.00 – 137.00 area.
Let’s see if today’s U.S. producer price index (PPI) release will help extend USD/JPY’s weeks-long downtrend.
Investors see producer prices maintaining its 0.2% monthly uptick in November while the core figure could speed up from 0.0% to 0.2%.
A much slower PPI would help the Fed justify its rate hikes from 75 bps to “only” 50 bps in December.
USD/JPY could dip to its monthly lows and might even head to new December lows in the next couple of days.
An upside surprise, on the other hand, would support speculations that the Fed is eyeing a higher terminal rate or a longer period of high interest rates.
Watch the newswires closely for any USD-friendly headline that might bust USD/JPY above its established descending channel!
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