Was expectations higher?
The initial reaction was the dollar moving higher in the USDJPY after the MoM CPi came in at 0.4% MoM. But the YoY figures failed to move above the expectations and ex food and energy declined from 2.2% YoY last month to 2.1% this month. We are now seeing the USDJPY tumble lower.
Technically, the USDJPY moved above the 61.8% of the move down from the April 28th high at the 109.46 but failed. This was the 2nd look above that retracement level (last Friday, after the better than expected retail sales and Michigan sentiment, the pair rallied above but found sellers). The pair has moved below the 50% of the days rally higher at 109.26 (see 5-minute chart below). The close from yesterday was a 109.01. The low on this move has dipped to 109.16.
Industrial production and capacity utilization will be released at 9:15 AM ET. Industrial production is expected to rise by 0.3% vs. -0.6% last month. capacity utilization is expected to increase to 75.0% vs. 74.8%.
