When are US monthly retail sales figures and how could they affect USD/JPY?

US Monthly Retail Sales Overview

Thursday's US economic docket highlights the release of monthly retail sales figures for March, scheduled later during the early North American session at 12:30 GMT. The headline sales are estimated to have risen by a seasonally adjusted 0.6% during the reported month as against the 0.3% growth recorded in February. Excluding autos, core retail sales probably climbed by 0.2% in March, up from the 1.2% decline reported in the previous month.

How Could it Affect USD/JPY?

Ahead of the key release, a softer tone around the US Treasury bond yields kept the US dollar bulls on the defensive and dragged the USD/JPY pair further away from the two-decade high touched the previous day. That said, a generally positive tone around the equity markets, along with the divergence in the monetary policy stance adopted by the Fed and the Bank of Japan, weighed on the JPY and helped limit losses. Stronger US consumer spending data reaffirm bets for a more aggressive policy tightening by the Fed and push the US bond yields/USD higher. Conversely, any disappointment is unlikely to prompt any aggressive USD selling, suggesting that the path of least resistance for the USD/JPY pair is to the upside.

According to Joseph Trevisani, Senior Analyst at FXStreet: “Markets will react in a straight line with the strength of the sales figures. Better than expected results support Treasury rates and the dollar. Equities should be able to ignore the prospect of higher interest rates as strong sales mean an expanding economy. Weak or negative sales raise a host of problems about the second quarter but the immediate reaction will be lower Treasury yields, a lower dollar and fading equities. For the stock market, the prospect of a recession is more daunting than higher interest rates.”

Key Notes

 •  US Retail Sales March Preview: Waiting for the inflation hammer to drop

 •  USD/JPY finds a short-lived pullback from 125.40 ahead of the US Retail Sales

 •  USD/JPY could move close to the 126.25 closest overhead resistance level

About US Retail Sales

The Retail Sales released by the US Census Bureau measures the total receipts of retail stores. Monthly per cent changes reflect the rate of changes in such sales. Changes in Retail Sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive (or bullish) for the USD, while a low reading is seen as negative (or bearish).