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USD/JPY better bid fundamentally

FXStreet (Guatemala) - USD/JPY is trading at 109.43, up 0.62% on the day, having posted a daily high at 109.50 and low at 108.48.

With a stronger greenback and decent data from the US session, the pair is back into over bought territory. This coupled with Japans recent data disappointments; the pair is however well bid still fundamentally. Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman explained that Japan’s report gave us slightly disappointing inflation figures. The BOJ assumes the sales tax increase boosts the core measure by two percentage points. It is this measure (core minus retail sales tax impact) that is key. It slipped to 1.1% from 1.3%. Tokyo, which reports CPI with a shorter lag, reported that its core CPI eased to 2.6% in September. We expect that the yen's recent decline will boost CPI in the coming months." Chandler said that they expect this to be sufficient to keep the BOJ from accelerating its already aggressive quantitative easing. “Focus will be on the supplemental budget."

USD/JPY risks next week

RBS analysts explained that next week, Japan's third quarter Tankan Survey will give a read on third quarter business confidence. “Abe recently noted he will be mindful of the impact of a weaker JPY on local businesses. Amid softening activity indicators and renewed easing efforts by the PBOC, China releases official PMIs in both manufacturing and services”.

USD/JPY note worthy levels

Spot is presently trading at 109.43, and next resistance can be seen at 109.50, 109.76 (Daily Classic R2), 110.07 (Weekly Classic R1), 110.13 (Daily Classic R3) and 111.11 (Weekly Classic R2). Support below can be found at 109.39 (Yesterday's High), 109.26 (Daily Classic R1), 109.11 (Hourly 20 EMA), 109.04 and 109.04.

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