USD/JPY holds above 118.45 after US data

FXStreet (Córdoba) - USD/JPY was retreating from levels near 119.00 but found support above 118.45 and climbed to 118.82 after the release of US data.

In the US, the first report showed that the Empire Manufacturing index dropped from 10.16 to -3.58; expectations were for an increase to 12.00; while industrial production rose 1.3% in November above the 0.7% expected.

“With all eyes on Wednesday’s FOMC decision, and in particular, the “considerable time” phrase in the text, whose removal will imply a rate hike within about 6 months, this production data shifts the balance of risks towards dropping that phrase. But with CPI out on Wednesday, and likely to show a decent decline in headline inflation, we still marginally favour no change to this part of the text. This is getting awfully close though”, said Rob Carnell from ING.

Despite data, USD/JPY continues to trade in a short term range, moving sideways with support at 118.00 and resistance at 119.00.