USD/JPY shrugs after Japanese wages, household spending falter
USD/JPY is almost unchanged today, trading at 135.18.
Japan's households are again holding tightly to the purse strings, as household spending fell 1.9% y/y in March, following a 1.6% gain in February. The consensus estimate stood at 0.4%. Household spending has been in a slump, with only one gain in the past five readings.
There was no relief from wage data, as real wages declined in March for a twelfth straight month, at -2.9%. Nominal pay growth rose 0.8% y/y in March, but this fell well short of the CPI rate of 3.8% used to calculate real wages. In March, large companies negotiated substantial wage hikes, but so far this has not translated into higher wage growth, which could prod new Governor Ueda to normalize policy.
Investors are hoping for some insights into Ueda's plans, with the release of the BoJ Summary of Opinions on Wednesday. The summary covers the BoJ's April meeting, the first to be chaired by Ueda. At the meeting, the BoJ removed guidance on rate levels and said it would conduct a review of its policies.
The Federal Reserve has warned that the turmoil in the banking sector has led to tighter credit conditions which could slow down growth in the US economy. These concerns were highlighted in the Fed's bi-annual financial stability report. The Fed's quarterly Senior Loan Officer Opinion Survey echoed these worries, with bank officials saying that they would tighten lending requirements and expressing concerns about a recession and deposit withdrawals.
The financial stability report tried to put on a positive spin, stating, that "a large majority of banks" were able to handle the strain from higher rates and that US banks were "well capitalised". Still, the Fed will have to keep in mind the danger of contagion and give thought to cutting rates later in the year in order to minimize the chances of a recession.
USD/JPY is putting pressure on resistance at 135.37. Above, the next resistance line is 137.24
There is support at 134.50 and 132.97
Japan's households are again holding tightly to the purse strings, as household spending fell 1.9% y/y in March, following a 1.6% gain in February. The consensus estimate stood at 0.4%. Household spending has been in a slump, with only one gain in the past five readings.
There was no relief from wage data, as real wages declined in March for a twelfth straight month, at -2.9%. Nominal pay growth rose 0.8% y/y in March, but this fell well short of the CPI rate of 3.8% used to calculate real wages. In March, large companies negotiated substantial wage hikes, but so far this has not translated into higher wage growth, which could prod new Governor Ueda to normalize policy.
Investors are hoping for some insights into Ueda's plans, with the release of the BoJ Summary of Opinions on Wednesday. The summary covers the BoJ's April meeting, the first to be chaired by Ueda. At the meeting, the BoJ removed guidance on rate levels and said it would conduct a review of its policies.
The Federal Reserve has warned that the turmoil in the banking sector has led to tighter credit conditions which could slow down growth in the US economy. These concerns were highlighted in the Fed's bi-annual financial stability report. The Fed's quarterly Senior Loan Officer Opinion Survey echoed these worries, with bank officials saying that they would tighten lending requirements and expressing concerns about a recession and deposit withdrawals.
The financial stability report tried to put on a positive spin, stating, that "a large majority of banks" were able to handle the strain from higher rates and that US banks were "well capitalised". Still, the Fed will have to keep in mind the danger of contagion and give thought to cutting rates later in the year in order to minimize the chances of a recession.
USD/JPY is putting pressure on resistance at 135.37. Above, the next resistance line is 137.24
There is support at 134.50 and 132.97
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