Japanese Yen (¥) Unmoved By Huge Manufacturer Gains

Japanese Yen (¥) Unmoved By Huge Manufacturer Gains

The Japanese Yen was steady against the US Dollar Monday, despite a survey of big manufacturers which found them more cheerful than they’ve been for more than three years and seemed to underscore the Bank of Japan’s relative economic optimism.

The official ‘tankan’ survey for this year’s second quarter showed large manufacturers’ sentiment at 17, its best since March, 2014. Sentiment at large non-manufacturing firms also rose, for a second straight quarter, and is now at its highest since December, 2015.

The ‘outlook’ part of the survey found large manufacturers hopeful, rising to a score of 15 from the previous quarter’s 11. The tankan’s indexes are derived by simply subtracting the number of respondents who say conditions are bad from those who say they are good, with any positive reading meaning that the optimists are winning.

However the Japanese Yen made only modest gains against the US Dollar after this quite punchy survey. Despite the tankan’s Strength the Japanese economic story remains what it was before, one of strong export demand but more worrying domestic levels.

The bottom line is that it remains extremely doubtful that Japan’s extraordinarily expansive monetary policy will be reined in anytime soon as consumer price inflation remains at a fraction of the Bank of Japan’s 2% target. As a strong Japan speaks to stronger global growth prospects it’s easy to see why the defensive Yen might not gain on better local economic numbers.

Away from data, politics may also be weighing on the Yen market. Japan’s ruling Liberal Democratic Party was thrashed at the polls in Sunday’s Tokyo assembly election. It was seen as a referendum on Prime Minister Shinzo Abe’s administration. Voters gave it an unambiguous ‘thumbs down’ by flocking instead to the Tokyoites First party of city Governor Yuriko Koike.

Japanese Yen Unmoved By Tankan’s Big Manufacturer Gains

  • The second quarter’s tankan survey was an upbeat affair
  • The Yen failed to capitalize on this
  • There are probably no implications for Japan’s ultra-loose monetary settings

Technical Analysis

Overall, the bias in prices is: Upwards.

Short term: Prices are stalling.

Intermediate term: Prices are ranging.

By the way, prices are vulnerable to a correction towards 111.81.

The projected upper bound is: 114.86.

The projected lower bound is: 111.38.

The projected closing price is: 113.12.


A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 25 black candles.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 81.1052. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 3 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 64.57. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 38 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 145.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 8 period(s) ago.


The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 13 period(s) ago.

Rex Takasugi – TD Profile

FOREX JPY= closed down -0.290 at 113.080. Volume was 56% below average (consolidating) and Bollinger Bands were 0% narrower than normal.

Open      High       Low       Close       Volume
113.360  113.460  112.710  113.080  49,814

Technical Outlook
Short Term:                Overbought
Intermediate Term:  Bullish
Long Term:                 Bullish

Moving Averages: 10-period   50-period   200-period
Close:                       112.14          111.65          111.30
Volatility:                 7                   10                12
Volume:                   102,311        110,933      124,434

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.


FOREX JPY= is currently 1.6% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. Our volume indicators reflect moderate flows of volume into JPY= (mildly bullish). Our trend forecasting oscillators are currently bullish on JPY= and have had this outlook for the last 5 periods.

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Ivy Heffernan

Ivy Heffernan, student of Economics at Buckingham University. Junior Analyst at HeffX and experienced marketing director.

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