The USD/JPY pair traded in a tight range early Wednesday after the US dollar soared against most of its major counterparts, in addition to the strong yen which forced the pair not to take a specific direction.
The Strong dollar was supported by two factors: the risk aversion which dominated the FX market and increased demand for the safe haven dollar, and the other factor is the FOMC decision which did not carry any surprise to the market, keeping the greenback on the upside track.
The FOMC decision send the equity market down, but it provided further support to the greenback which got rid of the pressure of the QE3, sending the federal currency to its highest level in eleven months against the euro.
On Thursday at 23:50 GMT (Wednesday), Japan will release the Tankan Large Manufacturers Index for the fourth quarter, where it’s expected to drop by 2 from the previous rise of 2, while the Tankan Non-Manufacturing Index is expected to remain steady at 1 the same as the prior reading.
As for the Tankan Large All Industry Capex it is expected to rise by 2.2% from the previous reading of 3.0%.
The U.S. economy will release the Producer Price Index for November at 13:30 GMT where it’s expected to come at 0.2% from the previous reading of -0.3%. The annual Producer Price Index is expected to rise to 6.0% from the previous reading of 5.9%.
The U.S. Current Account Balance for the third quarter will be up at 13:30 GMT and the deficit is expected to narrow to $107.7 billion from the previous deficit of $118.0 billion.
The Empire Manufacturing Index for December will be released at 13:30 GMT where it’s expected to come at 2 from the prior reading of 0.61.
At 13:30 GMT, U.S. economy will issue its weekly initial claims numbers, where the number of people filing for first-time claims for the state unemployment insurance increased 381 thousand last week.
The Net Long-term TIC Flows for October will be up at 14:00 GMT, where the previous reading was $68.6 billion, as for the Total Net TIC Flows it had a previous reading of $57.4 billion.
The U.S. Industrial Production for November will be released at 14:15 GMT, where it’s expected to come at 0.2% from the previous of 0.7%. The Capacity Utilization for November is expected to come at 77.9% from the prior 77.8%.
The Philadelphia Fed index is due at 15:00 GMT for December and expected to rise to 5.0 from 3.6.