YEN WEAKENS AGAINST THE GREENBACK
The USD/JPY price resumed upward movement on the background of the US dollar strength and controversial news from Japan. The Liberal Democratic Party of the Prime Minister Shinzo Abe lost the elections in Tokyo which may signal possible problems with the support of the government in the country.
On the other hand, Japan does not have a powerful opposition party, so the influence of the recent elections in the country’s capital is likely to have a short-lived impact.
Further news from Japan was final manufacturing PMI which increased to 52.4 in June against the expected 54.0, but the consumer confidence index in the same month declined by 0.3 to 43.3, that is 0.6 less than expected. We should note that fears of a possible correction in the US stock markets may lead to increased demand for defensive assets like the Japanese yen.
Currently, the quotes are consolidating near the level of 112.50 and the immediate goals in case of further increases within the channel will be 113.10 and 114.00. In order to switch to a negative trend, the quotes need to break through the lower limit of the ascending channel and the strong support at 111.70. Today the mood of investors will depend on American macro statics on ISM manufacturing PMI and contraction spending that will be published at 14:00 GMT.