The Japanese yen was slightly stronger against the USD in the Asian session. This happened after Japan released important trade data.
February 20, OctaFX – In January, imports contracted by -0.6%. This was better than the expected contraction of -2.8%.
In the same month, exports contracted by -8.4%, which was worse than the consensus estimate of -5.5%. In December, exports decreased by 3.9%. The trade deficit increased to 1,415 billion yen.
This deficit will likely change after a few years. This is because many Japanese companies in the EU will likely move back there after the two signed a free trade deal. Already, Honda has announced that it will move from the UK to Japan.
USDJPY technical analysis
The USDJPY pair moved slightly higher today after the Japanese trade deficit rose faster than expected. The pair remains within a narrow range. It is now trading at 110.82, which is slightly higher than the 42-day and 21-day EMAs.
The TSI has remained between the 30 and 70 levels, which is a sign of consolidation. The pair could make some major moves in either direction in the medium-term.
This article was provided by OctaFX. It should NOT substitute for professional marketing consulting. Forex margin trading involves substantial risks. Forex margin trading exposes participants to risks including, but not limited to, changes in political conditions, economic factors, and other factors. All of which may substantially affect the price or availability of one or more foreign currencies.