USDJPY Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | 0.81% | 119.3 Pips |  |
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| Week to-date | 4.54% | 647.899 Pips | |
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| October | 3.86% | 555.199 Pips |  |
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Upcoming key events (London Time)
Thu 01:30 PM USD CPI Inflation Rate (12-mth) Fri 01:30 PM USD Producer Price Index (12-mth)
What happened lately
In August, Japan’s current account, which reflects the country’s international trade and investment position, showed a notable improvement. The non-seasonal adjustment figure rose to 3803.6¥, up from 3193¥ recorded in July, indicating a stronger financial surplus. This suggests that Japan experienced healthier export performance or lower imports, ultimately contributing positively to its economy. However, a contrasting development is seen in the labor market, where Japan’s Total Labor Cash Earnings fell to 3% in August from a previous 3.6% in July, as reported by the Ministry of Health, Labour and Welfare (MHLW). This reduction in wage growth might dampen consumer spending, which could impact domestic demand and economic momentum within the country.
The Japanese economic data, specifically the current account figure, generally represents fundamental strength and may under normal circumstances support the Japanese yen. However, the reduction in wage growth paints a mixed economic picture, reflecting a potential area of concern for domestic consumption.
The USDJPY movement in the foreign exchange market registered a 0.81% increase to a level of 149.26 on Wednesday, signifying a stronger US dollar against the Japanese yen. This rise could be associated with market expectations ahead of critical US economic data, such as the upcoming Consumer Price Index (CPI) inflation rate figures, due on Thursday, and the Producer Price Index on Friday. These indicators bear high impact and their outcomes can drive the market’s expectation regarding the US Federal Reserve’s monetary policy stance. An upward movement in inflation might prompt the Fed to adopt a tighter monetary approach, further bolstering the USD and potentially driving the USDJPY pair higher. Conversely, subdued inflation data could taper off the bullish sentiment for the USD, potentially easing the pair’s upward trajectory. Hence, traders and investors will likely keep a close watch on these economic indicators to gauge the future direction of USDJPY.
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What can we expect from USDJPY today?
USDJPY on Wednesday rose 0.81% to 149.26. Price is above 9-Day EMA while Stochastic is rising in overbought zone.
Updated daily direction for USDJPY looks bullish as the pair ended higher after Wednesday trading session.
Looking ahead for the day, immediate upside resistance level is R1 at 149.75 with break above could target R2 at 150.24. While towards the downside, we are looking at daily low of 148.01 as an important support. Break below this level could weaken the current bullish momentum. A break above 149.37 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 4.54% over the past few days.
Key levels to watch out:
| R3 | 151.11 |
| R2 | 150.24 |
| R1 | 149.75 |
| Daily Pivot | 148.88 |
| S1 | 148.39 |
| S2 | 147.52 |
| S3 | 147.03 |