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USD/JPY Signal - Japan Inflation - 31 Mar 2017

Signal details
Entry Price: 
112.00
Close Price: 
111.32
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
ITM
How we trade
5/5 of 2 ratings

Consumer prices in Japan showed a moderate increase as inflation was seen strengthening in February. The data was seen as positive as the monetary policy efforts from the central bank was seen to be having the desired effect on stoking inflation higher.

Official estimates showed that the national consumer price index or CPI rose 0.3% in the 12-months ending February. Excluding food and energy prices, the core inflation rate increased 0.2% following a 0.1% increase from the month before. Inflation in Japan was seen to be steadily declining for ten consecutive months previously through December.

The Tokyo core inflation rate, another measure of consumer prices and considered to be a leading indicator of a nationwide price trends however, declined 0.4% in March, extending the declines from February's -0.3%. Inflation in Japan has been mixed and although some of the other developed economies have managed to see the consumer prices rise towards the central bank targets, it wasn't the same case with Japan.

In a separate report, data released earlier today showed that Japan's unemployment rate declined unexpectedly in February. Official records showed that Japan's jobless rate fell to 2.8% in February, following a 3.0% unemployment rate that was registered in January. There was little reaction to the news as wages form the more important aspect of the data as it directly influences the consumer prices.

USDJPY turned bullish yesterday as the dollar was boosted by stronger than expected fourth quarter GDP data. The yen continues to remain weak and we expect to see some near term gains. However, watch out for a pullback in the near term. USDJPY is currently struggling near the 112.00 resistance level and we can expect exhaustion to the trend in the short term.

Therefore, for today's binary options trading signal, we recommend daily PUT options in USDJPY as we expect the currency pair to close bearish. Look to purchase PUT options near 112.00 for a 20:00 GMT expiry time as U.S. core PCE and personal income and spending data will be released later in the day and could come out potentially weaker.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.