USD/JPY holds lower for first session in four

The US dollar fluctuated lower in a tight range during the Asian session today, to fall in the second session from its highest since March 5 against the Japanese Yen, following developments and economic data released by the Japanese economy and after the FOMC member and Chairman of the Reserve Bank of Boston, Erik Rosengren, speech at Davidson College, North Carolina, ahead of economic developments and data expected Tuesday by the US economy, the largest economy in the world.

At 05:49 GMT, USD/JPY declined by 0.09% to 111.94 compared to the opening levels at 112.04, after reaching the lowest level at 111.89, while the highest at 112.05.

We followed the Japanese economy release of it monthly reading of Tertiary Industry Activity Index, which showed a decline of 0.6% versus 0.6% in January, worse than expectations of 0.2% decline. BOJ Governor Haruhiko Kuroda said that his country's economy has slightly slowed down and wage growth was somewhat disappointing.

Kuroda also noted that Japan's labor productivity registered faster growth than other developed countries, which weighed heavily on the performance of inflationary pressures. He also pointed out that there is a rise in prices in the service sector, which witnesses an increase in labor force. He added that the next step would be to cut interest rates, as the Japanese central bank has time to make a decision, adding that the yen is stabilizing between 110 and 120 per dollar and that level is convenient.

In the same context, the Japanese Economy Minister Hiroshige Sekō said during a press conference with the US Trade Representative Robert Lighthizer in Washington yesterday, that he had “frank and good” trade talks with his US counterpart, in response to US President Donald Trump's recent criticism on the trade surplus in favor of Japan with his country, which reached a peak of $69 billion and that he wants to reach a two-way deal to address it.

The comments were made after the visit of the Japanese Economy Minister to the United States for formal trade talks between Tokyo and Washington, which will continue until next Thursday, following the administration of President Donald Trump adoption of trade protectionism, which led many countries to enter into trade negotiations with Trump management to avoid the outbreak of a trade war.

Additionally, we would like to point out the Japanese government announced earlier this month a 10-day holiday from Saturday (27 April) to Monday (6 May) for Japan's celebrations of the new emperor there, which for crowning the Prince at the beginning of May, it's worth mentioning that this six-day holiday will be the longest in Japan's history.

Otherwise, markets are currently looking for the US economy to release its monthly reading for industrial Production Index, which could reflect a rapid growth of 0.2% from 0.1% in February, with the Capacity Utilization Rate index reading which is forecasted to show growth to 79.2% against the previous 78.2%, ahead of the Housing Market Index reading by the National Association of Home Builders, which may reflect a widening to 63 versus 62 in March.