The greenback came under pressure again versus the Japanese yen following the release of March US consuming spending of March which came up monthly by 0.3% while the consensus was referring to rising by 0.4% after rising by 0.9% in February showing easing of US consuming pace after US consumer confidence of April came last week at 69.2 while it was expected to rose to 69.7 from 69.5 in March increasing the speculations of having more Fed's stimulating steps as its inflation preferred gauge PCE came today down to 2.1% y/y in March and it was expected to slide to 2.2% from 2.3% in February showing easing of the inflation pressure in the same time.
The greenback is trading now again below 80 psychological level versus the Japanese yen has been underpinned after BOJ had raised its JGB purchase by just Y10 trillion extending its 2 years maturity purchase of them to three years extending in the same time the deadline of its asset purchasing plan 6 months to June 2013 buying more 3 years corporate bonds showing its belief in reaching the short term inflation target which it has placed at 1% y/y last February.
The Japanese yen could get use of the dovish sentiment as a low yielding funding currency following this weak consuming figure too and God willing, USDJPY can meet now other supporting levels 78.97, 78.17, 77.35, 76.47 before 76.01 whereas it has started rising to 84.16 underpinned by the recent BOJ easing steps for fighting deflation and stimulating the economy which weighed down on the Japanese yen versus the greenback and in the case of rising of this pair again, it can face resisting level now at 81.76 and this can be followed by 83.37 before 84.16 again.
FX Market Strategist
Walid Salah El Din