Japan’s record current account deficit

Last week was a wild week for forex market. 

The USDJPY opened at 97.73 and set off to as high as 99.68 before dipping to a low of 96.57. It closed at 98.26 for the week. This week the forex market is expected to perform a bit normal.   

USDJPY is expected to follow regional Asian currencies that will take their lead from equity markets until Europe session open. 

The USDJPY in familiar fashion inched downward during the early Asian session (from 23:00GMT) as against the uptrend during the previous US session. The downtrend is arrested at 61.8% retracement of swing low A to swing high B at opening of Japanese bank session at 24:00 GMT with Japanese Government released of report on current account. The numbers show Japan has recorded its biggest current account deficit on record in January. The current account deficit, the first in 13 years came in at 172.8 Billion Yen, much higher than market forecasts of 15.3 Billion Yen. The Nikkei managed to hold for a while before it went southward testing Friday closed.

 

The low was also supported by the 60 period ema (see chart above) with RSI moving above 20 and blue lag overcome the 15 level. All this painted for a morning rally of USDJPY during the Asian session.