USDJPY on Friday dropped -0.41% to 140.76. Week ending 2024-09-13 moved lower by -1.21%. What you need to know.

USDJPY Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.41%	-58.601 Pips
Week 242024-09-13	-1.21%	-172.199 Pips
September	-2.85%	-412.6 Pips

Upcoming key events for the new week (London Time)

Tue 01:30 PM Monthly Retail Trade (1-mth)
Wed 07:00 PM Fed Interest Rate Decision (Federal Funds Rate)
Wed 07:00 PM Interest Rate Projections
Thu 01:30 PM Initial Unemployment Insurance Claims
Fri 04:00 AM Bank of Japan Short-Term Policy Interest Rate

What happened over the week

The United States experienced mixed economic data recently. The University of Michigan reported an increase in the Index of Consumer Sentiment for September, which rose to 69 points, up from 67.9 points in August. Conversely, the Department of Labor noted an increase in Initial Unemployment Insurance Claims for the week ending September 7, rising to 230,000 from a revised figure of 227,000. Furthermore, the Bureau of Labor Statistics revealed a 12-month Producer Price Index (PPI) decrease to 1.7% in August from 2.2% in July, while the monthly PPI rose slightly to 0.2% from the previous 0.1%. The Consumer Price Index (CPI) inflation rate held steady at 0.2% for August, with the annual rate dropping to 2.5% from 2.9% in July. These mixed signals indicate some economic stability, coupled with minor contractions in inflation pressures.

In Japan, the Cabinet Office reported that the economy grew by 0.7% in the April-June quarter of 2024, marking a revised annualized growth rate of 2.9%, down slightly from the initial estimate of 3.1%. This lower revision suggests the Japanese economy is expanding at a moderate pace, which could influence the Bank of Japan’s monetary policy stance to remain accommodative in order to support sustained growth.

The movement of the USD/JPY pair is intricately linked to the recent economic reports and upcoming events. The U.S. data showing steady consumer sentiment and stable inflation indicates a relatively stable economic outlook, but rising unemployment claims introduce some uncertainty. These mixed factors may cause fluctuations in investor confidence regarding the U.S. dollar. Upcoming high-impact events, including the Federal Reserve’s interest rate decision and projections, are crucial as they will provide guidance on the future monetary policy direction. A rate hike could strengthen the USD, while a dovish stance might weaken it further. Meanwhile, Japan’s moderate economic growth sustains a relatively weaker yen. The drop in USDJPY by 0.41% to 140.760 and a weekly decline of 1.21% suggest recent bearish sentiment towards the U.S. dollar against the yen. The upcoming Bank of Japan’s policy decisions will also be pivotal. If Japan maintains negative rates, it may keep the yen subdued, but if U.S. signals diverging paths, fluctuations in the USD/JPY pair are expected.

From social media

🇯🇵 Japan Total Labor Cash Earnings (12-mth) in July rose to 3.6%, though lower than from the previous growth rate figure of 4.5% in June. https://t.co/Tmun9soTQR

— Market Recap (@forexforum) September 8, 2024

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

USDJPY on Friday dropped -0.41% to 140.76. Price is below 9-Day EMA while Stochastic is falling. For the week ending ,2024-09-13, the pair dropped -1.21% or -172.199 pips lower.

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

For the new week, our technical outlook looks bearish, immediate support level is at 139.47 (WS1) with break below could see further selling pressure towards 138.18 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 143.68 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 140.28 would indicate selling pressure.

For the month of September, USDJPY is down by -2.85% or -412.6 pips lower.

Weekly key levels to watch out:

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