USDJPY rises 0.95% to 141.99 amid mixed economic data from Japan and the US

USDJPY Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.95%	133.799 Pips
Week to-date	0.83%	116.901 Pips
September	-2.02%	-293.1 Pips

Upcoming key events (London Time)

Wed 07:00 PM USD Fed Interest Rate Decision (Federal Funds Rate)
Wed 07:00 PM USD Interest Rate Projections

What happened lately

Japan’s export growth rate over a 12-month period in August saw a significant decrease, falling to 5.6% from a revised 10.2% in July, as reported by the Ministry of Finance Japan. Additionally, the country’s merchandise trade balance showed a deeper deficit, dropping to -695.3 billion yen in August from a revised -628.7 billion yen in July. The import growth over the same period also slumped considerably, falling to 2.3% in August from a robust 16.6% in July.

In the United States, the economic data presented a mixed picture. U.S. industrial production showed a positive turnaround, increasing by 0.8% in August, in stark contrast to the -0.6% recorded in July. However, the retail trade control group experienced a slight decline, dropping to 0.3% in August from a revised 0.4% in July, according to the Census Bureau. Moreover, monthly retail trade excluding automobiles saw a significant decline, decreasing to 0.1% in August from 0.4% in the previous month.

The recent economic data from both Japan and the U.S. has important implications for the USD/JPY exchange rate. Japan’s declining export and import growth rates, coupled with a growing trade deficit, suggest a weakening economic outlook, which might put downward pressure on the Japanese yen. On the other hand, the U.S. data presents a mixed economic scenario. Industrial production is on the rise, which could bolster the dollar, but the weakening retail data might offset some of that strength. As a result, the USD/JPY exchange rate has risen by 0.95% to 141.99. Additionally, upcoming high-impact events, such as the Federal Reserve’s interest rate decision and interest rate projections, could further influence the exchange rate. If the Fed signals future rate hikes, the USD could strengthen further against the JPY.

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What can we expect from USDJPY today?

USDJPY on Tuesday rose 0.95% to 141.99. Price is below 9-Day EMA while Stochastic is rising.

Updated daily direction for USDJPY looks bullish as the pair ended higher after Tuesday trading session.

Looking ahead for the day, immediate upside resistance level is R1 at 142.87 with break above could target R2 at 143.74. While towards the downside, we are looking at daily low of 140.31 as an important support. Break below this level could weaken the current bullish momentum. A break above 142.47 would suggest bullish bias after recent positive movement.

For the week to-date, take note that USDJPY is mixed as compared to prior week.

Key levels to watch out: