Solid News

Changes in the Government had a Positive Impact on the Yen

8/12/2022 12:49 PM

The Japanese currency strengthened against the US dollar and currently holds an uptrend around 133.28.

One of the reasons for this dynamic was the changes in the composition of the national parliament, initiated by Prime Minister Fumio Kishida, against the backdrop of declining voter support due to economic problems. Yesterday, the chief executive presented the new composition of the government. The positive news for the yen was that the current finance minister Shunichi Suzuki managed to keep his post, which means almost unlimited confidence in his actions from the country's political leadership. As for the impact of macroeconomic data, there is also a positive trend here: the corporate goods price index added 0.4% in July, which led to an increase of 8.6% YoY against analysts' expected 8.4% indicator.

The US dollar is correcting, coming close to 105.000 in the USD Index. Although the number of initial applications for unemployment benefits did not justify the analysts' forecast of 263.0K and amounted to 262.0K, this is significantly higher than last week's figure of 248.0K, and the total number of citizens receiving payments from the state reached 1.428M people from 1.420M people earlier. Thus, after the July low of 1.300M people, the value turned to growth, reaching early spring 2022, and if the trend continues, the number of people receiving benefits in the United States may exceed the annual anti-record by October.

The trading instrument is moving within the global uptrend, declining along the support line. Technical indicators maintain an increasing sell signal: indicator Alligator's EMA oscillation range expands, and the AO oscillator histogram forms downward bars in the sell zone.

Resistance levels: 134.90, 138.95. | Support levels: 131.57, 126.80.

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