USD/JPY Falls to a Weekly Low on a Weaker PMI and Leading Indicator

Talking Points:

• US continuing claims highest since July
• US preliminary PMI disappoints expectations
• USD/JPY falls to a weekly low

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The US Dollar fell about fifty points against the Japanese Yen this morning, as a mix of data painted a worse picture of the US economy in the December through January period.

A small USD/JPY decline began with the release of initial and continuing jobless claims. Initial Jobless Claims for the week of January 18 was reported at 326K, better than the expected 330K claims and up by 1K from the revised 325K reported for the prior week. However, continuing claims were reported at 3056K, which was worse than expected and the highest amount of continuing claims since July.

Then, Markit’s US preliminary PMI for January was reported at 53.7, disappointing expectations for 55.0 and down from 54.4 in December. The disappointing report caught traders’ attention and sent USD/JPY 15 pips lower to 103.70.

Only a few minutes after that, US house prices were reported 0.1% higher in November, the smallest prices gain in more than a year and below expectations for 0.4% rise in house prices. The USD/JPY reaction to the release was more muted.

Finally the US Leading Indicator, which forecasts economic activity for the upcoming 3 to 6 months, disappointed expectations at 0.1% for December, coming in below forecasts for 0.2% and down from the revised 1.0% index result in November.

USD/JPY fell to a weekly low of 103.48 following the Leading Indicator release. The pair may next see support by the December 13 high at 103.37, and then further support may come in by the monthly low at 102.85.

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USD/JPY 2-Minute: January 23, 2014

Chart created by Benjamin Spier using Marketscope 2.0

-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to [email protected] .

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