USDJPY
The USDJPY pair declined slightly as the market reacted to a barrage of news from Japan. Yesterday, Shinzo Abe, the country’s prime minister unveiled a $1 trillion stimulus package that will be passed in parliament today. This is the biggest stimulus the third biggest economy has ever launched. When making the announcement, the prime minister ruled out a national lockdown. Instead, he declared a state of emergency in seven key regions.
Overnight, we also received a number of important economic data from the country. The data showed that household spending rose by 0.8% in February, a month before COVID-19 was declared a global pandemic. The spending rose as more people stockpiled household products in anticipation of a national lockdown. The household spending declined by an annualized rate of 0.3%, which was better than the expected decline of 3.9%.
In addition, overall wage income of employees rose by 1% while overtime pay dropped by 1.20%. Another data released today was the leading index, which is a number that aggregates 12 key economic indicators. The index rose by 1.6% in February, which was better than in the previous months, when it was in the negative territory. In addition, the coincident index, which factors factory output, employment and retail sales rose by 1.6% in February. These numbers could show a significant drop the next time they are released.
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Looking at the two-hour chart, we see that the USD/JPY pair inched down by a few pips in the Asian session. The pair is trading at 108.76, which was slightly below the day’s high of 109.37. Also, we can see that the pair has formed a triple top (111.65) and a double bottom at 106.98. The pair also appears to be forming a symmetrical triangle pattern. I expect the downward trend to prevail if the pair moves below the important support at 108.10.