Monthly economic report the Japanese government released on Friday indicated some improvements in some sectors of the Japanese, including sector of the personal consumption. According to the report, country’ economy continues to recover at a moderate pace after the recent decline. Japanese government has raised assessment of the personal consumption and business sentiment indices.
It is not expected that the Bank of Japan will introduce additional measures of monetary policy easing at the meeting on September 21. This means that Japanese economy and stock market will not receive additional support from the Bank of Japan by means of the quantitative or qualitative easing (QQE). According to recent data, the number of sell orders for the USD exceeds the number of buy orders in the pairs compared with the yen.
On the other hand, it is not expected that the Yen will grow against the USD. Strong psychological level of 100.00 will prevent further decline in the pair USD/JPY.
Despite recent weak US macro-economic statistics, the pair USD/JPY remains above the level of 100.00 the lows reached in the June and August.
It is likely that the Bank of Japan and the US Fed will not change monetary policies. In this case the pair USD/JPY will continue to move in the narrow range of 100.60 и 104.20 (highs of September) and a wider range of 100.00 and 106.50 (Fibonacci 23.6% after the decline from the level of 125.65 since June 2015).
Today, investors’ attention will be focused on the US news. At 15:30 (GMT+3) consumer price index for August will be released. It is expected that the index will rise by 1.0% against 0.8% in July); at 17:00 Reuters/Michigan preliminary index of consumer confidence in September will become known. In case of the positive data the USD will receive support and traders will more actively close USD short positions at the end of the trading week.