Forecast: How will Japan industrial production data impact USD/JPY?

NEW YORK (Forex News Now) – The Japanese Ministry of Economy, Trade and Industry is due on Tuesday to publish its revised data on industrial production, in a major event likely to affect USD/JPY trading.

The report follows the release of the preliminary data two weeks ago, which showed that the total inflation-adjusted value of output produced by manufacturers, mines and utilities dropped by 1.8% in October, following a drop of 1.6% the previous month.

The ministry is scheduled to release the report at 6:30 A.M., GMT; as such the data is likely to dominate currency market trading early in the day.

The preliminary data came as somewhat of a surprise, given the forecasted drop of 2.6%, according to at least two major online FX trading news outlets.

According to USD/JPY analysis, a smaller-than-expected drop in industrial production could push USD/JPY toward short-term support around last Wednesday’s low of 83.46.

But should the revised data show a greater drop than was recorded in the preliminary data, the currency pair could head toward short-term resistance around 84.75, a 12-week high.