USDJPY rises 0.32% to 145.03 amid contrasting economic data from Japan and US

USDJPY Analysis

Performance after Thursday
Period	Pct	Chg	Momentum
Thursday	0.32%	46.9 Pips
Week to-date	0.72%	103 Pips
September	0.1%	14.4 Pips

Upcoming key events (London Time)

Fri 12:30 AM JPY Tokyo CPI (Inflation Rate) (12-mth)
Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)

What happened lately

In Japan, recent economic data indicates a weakening of inflationary pressures. According to the Statistics Bureau of Japan, Tokyo’s Consumer Price Index (CPI) excluding fresh food and energy in September remained unchanged at 1.6% compared to August. The Tokyo CPI excluding fresh food dropped significantly to 2% from 2.4% in the previous month. Furthermore, the overall Tokyo CPI, which represents the 12-month inflation rate, declined to 2.2% in September from 2.6% in August. These figures suggest a deceleration in consumer price growth, possibly indicating weakening demand or effective measures by the government to control inflation.

In contrast, recent economic data from the United States presents a varied economic picture. According to the U.S. Bureau of Economic Analysis, the GDP increased at an annual rate of 3.0% in Q2 2024. The housing market showed signs of recovery with pending home sales rising by 0.6% in August compared to a 5.5% decline in July. U.S. Durable Goods Orders excluding Transportation increased by 0.5%, rebounding from a revised -0.2% in July. However, New Orders for Durable Goods remained unchanged at 0% in August compared to a 9.9% boost in July. Initial unemployment claims saw a slight decline to 218K from 219K, indicating a marginal improvement in the labor market. Despite these positive signs, U.S. new-home sales decreased by 4.7% in August compared to a significant increase of 10.6% in July. Additionally, Durable Goods Orders excluding Defense dropped by -0.2% from 10.3% in July, and Nondefense Capital Goods Orders excluding Aircraft increased modestly by 0.2% from a revised -0.1% in July.

The recent economic data from both Japan and the United States will likely influence the USDJPY currency pair. The weaker inflation data from Japan may lead to further speculation that the Bank of Japan will maintain its accommodative monetary policy stance, potentially weakening the JPY. On the other hand, the robust GDP growth and improved housing and durable goods orders in the U.S. signify stronger economic activity, which could prompt the Federal Reserve to maintain or even tighten its monetary policy, thus supporting a stronger USD. Consequently, these dynamics are likely to exert upward pressure on the USDJPY pair, pushing the Japanese yen lower against the U.S. dollar.

Latest from X (Twitter)

Tweets by Bank_of_Japan_e

What can we expect from USDJPY today?

USDJPY on Thursday rose 0.32% to 145.03. Price is above 9-Day EMA while Stochastic is rising.

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

Looking ahead for the day, immediate upside resistance level is R1 at 145.47 with break above could target R2 at 145.9. While towards the downside, we are looking at daily low of 144.10 as an important support. Break below this level could weaken the current bullish momentum. A break above 145.22 would suggest bullish bias after recent positive movement.

For the week to-date, take note that USDJPY is bullish as the pair continued to trade higher and is up by 0.72% over the past few days.

Key levels to watch out: