USDJPY rises 0.6% to 143.48 on Monday, ends September down by 0.97%

USDJPY Analysis

Performance after Monday
Period	Pct	Chg	Momentum
Monday	0.6%	85.299 Pips
Week to-date	0.62%	88 Pips
September	-0.97%	-140.7 Pips

Upcoming key events (London Time)

No major events for the day.

What happened lately

Japan’s Tankan Large Manufacturing Index in Q3 remained static at 13 points, unchanged from Q2, signaling stability in the country’s manufacturing sector. Similarly, the Tankan Large Manufacturing Outlook for Q3 also stayed constant at 14 points compared to Q2, pointing to steady expectations for the near future. However, a notable dip occurred in the Tankan Large All Industry Capex, which fell to 10.6% from the previous 11.1% in Q2, indicating a reduction in capital expenditure across industries. Positive news emerged from the labor market, with Japan’s unemployment rate decreasing to 2.5% in August from 2.7% in July, as reported by the Statistics Bureau of Japan. This decline underlined improvements in employment conditions.

In the United States, the Chicago Purchasing Managers’ Index (PMI) experienced an increase in September, rising to 46.6 points from 46.1 points in August. This uptick, although modest, suggests a slight improvement in business activity within the Chicago area, a positive sign for the broader U.S. economy.

The combination of the unchanged Japanese manufacturing indices and the decline in capital expenditure reflects a cautious economic environment in Japan, potentially limiting growth prospects. However, the reduction in unemployment is a positive indicator, showcasing a strengthening labor market. Meanwhile, the U.S. PMI rise suggests an improving business climate. Against this backdrop, USDJPY rose by 0.6% to 143.48 on Monday but ended September down by 0.97%, reflecting the complex interplay of economic conditions in both countries. The absence of major economic events for the day implies limited immediate volatility, but the overall data suggest that USDJPY could experience upward pressure due to relative economic strength in the U.S. compared to Japan.

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What can we expect from USDJPY today?

USDJPY on Monday rose 0.6% to 143.48. Price is above 9-Day EMA while Stochastic is falling.

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

Looking ahead for the day, immediate upside resistance level is R1 at 144.39 with break above could target R2 at 145.29. While towards the downside, we are looking at daily low of 141.64 as an important support. Break below this level could weaken the current bullish momentum. A break above 143.91 would suggest bullish bias after recent positive movement.

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

USDJPY ended month of September trading session down by -0.97% or -140.7 pips lower.

Key levels to watch out: