USDJPY on Friday dropped -0.47% to 146.63. Week ending 2024-08-09 rose 0.72%. What happened.

USDJPY Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.47%	-69.3 Pips
Week 242024-08-09	0.72%	105 Pips
August	-2.08%	-311 Pips

Upcoming key events for the new week (London Time)

Tue 01:30 PM PPI excluding Food and Energy sectors (12-mth)
Wed 01:30 PM CPI Inflation Rate (1-mth)
Wed 01:30 PM CPI Inflation Rate (12-mth)
Thu 12:50 AM GDP (3-mth)
Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM Monthly Retail Trade (1-mth)

What happened over the week

In the week ending 03 August, U.S. Initial Unemployment Insurance Claims dropped to 233,000, marking a decrease from the prior figure of 250,000, which had been revised from an earlier 249,000. This data, reported by the Department of Labor, represents a continuing trend of labor market strength in the United States. Such a drop generally indicates that fewer individuals are claiming unemployment benefits, suggesting improved job stability and potential tightening in the labor market.

In Japan, Labor Cash Earnings saw a substantial increase in June, with a 12-month rise to 4.5%, up from the previously revised figure of 2%, which was initially 1.9%. This information, reported by the Ministry of Health, Labor, and Welfare (MHLW), indicates strong growth in employee compensation. Elevated cash earnings can point toward increased consumer spending power and potentially higher inflationary pressures within the Japanese economy.

The USDJPY exchange rate reacted to these economic developments with a drop of -0.47% to 146.63000 on Friday. Despite this drop, the pair rose by 0.72% for the week ending 09 August 2024. The decrease in U.S. Initial Unemployment Insurance Claims suggests robust economic conditions in the United States, traditionally bolstering the USD due to stronger economic prospects. However, the significant rise in Japan’s Labor Cash Earnings points to possible inflationary gains and a more aggressive stance from the Bank of Japan to curb inflation, thereby strengthening the JPY. The combination of these forces likely led to the fluctuation in the USDJPY exchange rate, with the market weighing stronger job data in the U.S. against higher wage costs and potential inflation in Japan.

From social media

🇯🇵 In the Provisional Report of Monthly Labour Survey for June, Japan's Labor Total Cash Earnings (12-mth) increased to 4.5% from the previously revised figure of 2% (up from 1.9%). https://t.co/Iwe0yk99SP

— Market Recap (@forexforum) August 11, 2024

What can we expect from USDJPY for the new week and what happened on Friday?

USDJPY on Friday dropped -0.47% to 146.63. Price is below 9-Day EMA while Stochastic is rising. For the week ending ,2024-08-09, the pair rose 0.72% or 105 pips higher.

Looking ahead, USDJPY looks bearish as the pair posted lower in Friday trading session.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 147.82 or at least consolidates above Weekly Pivot level of 146.17. On the downside, we are looking at week low 144.06 or 144.52 (WS1) as immediate support level. USDJPY need to break on either side to indicate a short-term bias. A break above 147.82 would suggest bullish bias after recent positive movement.

For the month of August, USDJPY is down by -2.08% or -311 pips lower.

Weekly key levels to watch out:

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