Forex News: USD/JPY Lower After Weak Confidence Report
Political deadlock resulting in higher taxes for most Americans as a result of the fiscal cliff/slope negotiations dented consumer confidence in January, the U. of Michigan Confidence index showed today. The private gauge (as opposed to the Conference Board’s monthly Consumer Confidence report) erased all of its progress in 2012, falling back to its lowest level since December 2011, at 71.3. The major miss from the expected print of 75.0 represents the single largest miss since February 2006. This is not a surprise, however, when considering what changed at the beginning of the year: the payroll tax cut expired, reducing disposable income for most Americans.
USDJPY 1-minute Chart: January 18, 2013
Charts Created using Marketscope – Prepared by Christopher Vecchio
Following the weak US data release, the USDJPY, which typically serves as a strong gauge of where US Treasury yields are moving, promptly fell, from 90.00 to as low as 89.76 following the release. Pressure remains biased to the upside in USDJPY, however, as the Bank of Japan is set to meet on January 22 and announce sweeping policy changes.
--- Written by Christopher Vecchio, Currency Analyst
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