Japanese yen is trading high compared to greenback which is due to the favorable data released today. The Industrial output of Japan has extended its gains in April as the manufacturers seem to be benefited from a recovery in appetite for capital goods, specially in key overseas markets.

The Official data which was released on Monday showed that factory output has grown 2.5% from the previous month record of 1.9% in April and leaving behind the expectation of 1.7%, as higher production of general-purpose and electrical machinery offset a contraction in cars and transportation equipment output.

The Retail sales yearly report also shows a markup of 12.0% which is more than the previous record of 5.2% and expectation of 0.1% but the retail sales monthly report has shown a drop in the figure to -4.5% against last month record of 1.2% and expectation of -1.6%

Conusmer confidence in Japan has improved to 34.1 from previous record of 33.1. Elsewhere, The Housing starts also records a improved figure of 7.1% against the previous record of 4.9% and leaving behind the forecast of 1.5%

Japan published on Friday the Unemployment Rate, which rose to 2.8% in April, while Tokyo inflation printed at -0.4% YoY in the same month.

One more item favoring the yen is that SoftBank (a Japanese multinational conglomerate holding company) is said to be considering offloading its stake in Paytm (an Indian mobile payments and commerce platform) a circa $1.5bn flow, if it should occur and SoftBank indeed bring the funds back to Japan (a lot of ifs but there you go).

On the other hand, Prime Minister Yoshihide Suga officially extended the state of emergency to June 20. The coronavirus vaccination rollout for people under the age of 65 in Japan will be carried out at the same time as those with underlying conditions to help speed up the process, the health minister of Japan said Sunday.

The health ministry had already instructed municipalities to begin sending vaccination vouchers to all those eligible under 65 from the middle of June. But now, even those without underlying medical conditions will be able to get their dose upon receiving the voucher next month.

USD/JPY 4 Hour Chart:

Support: 109.64 (S1), 109.46 (S2), 109.18 (S3).

Resistance: 110.09 (R1), 110.37 (R2), 110.55 (R3).

As US has no data to be released today, we expect the favorable data’s to support yen today. We expect a bearish trend for USD/JPY.