USDJPY Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | 0.48% | 71.9 Pips |  |
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| Week to-date | 0.6% | 89.6 Pips | |
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| October | 4.54% | 651.999 Pips |  |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In Japan, the National CPI Inflation Rate showed mixed signals in September. The CPI excluding Food and Energy increased slightly to 2.1% from August’s 2%, indicating underlying price pressures. Conversely, the inflation rate excluding Fresh Food dropped to 2.4%, down from 2.8% in August. The overall CPI also experienced a decline, moving to 2.5% from the previous month’s 3%. These figures suggest a deceleration in inflation, which could influence the Bank of Japan’s future monetary policy decisions. Additionally, Japan’s 12-month import growth slowed to 2.1% in September, and exports fell substantially to -1.7% from 5.5% in August, according to the Ministry of Finance. However, Japan’s merchandise trade balance showed improvement, narrowing the deficit to -294.3 billion yen in September.
In the United States, economic indicators convey positive momentum. Monthly Retail Trade excluding Automobiles rose by 0.5% in September, while the overall Retail Trade increased by 0.4%, both showing improvement over August’s figures. The Philadelphia Fed’s Manufacturing Business Outlook Survey illustrated significant recovery, rising to 10.3 points in October from 1.7 points in September. Additionally, the Department of Labor reported a drop in Initial Unemployment Insurance Claims to 241K in the week ending October 12, compared to the previous 258K. These developments signal robust consumer spending and improving business conditions, pointing to a healthy U.S. economic outlook.
Considering the mixed economic performance in Japan and the stronger economic indicators from the United States, the USDJPY rate experienced an upward movement, increasing by 0.48% to 150.23 on Thursday. The disparity in economic momentum likely contributed to a stronger U.S. dollar against the yen. With falling Japanese inflation rates and declining trade performance contrasting with vigorous U.S. retail and manufacturing growth, investors are more inclined towards the dollar, thus bolstering the USDJPY exchange rate. The lack of major market-moving events on the day also allowed the market to react primarily to economic fundamentals, supporting the dollar’s appreciation against the yen.
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What can we expect from USDJPY today?
USDJPY on Thursday rose 0.48% to 150.23. 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 150.62 with break above could target R2 at 151.01. While towards the downside, we are looking at daily low of 149.24 as an important support. Break below this level could weaken the current bullish momentum. A break above 150.32 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 0.6% over the past few days.
Key levels to watch out:
| R3 | 151.71 |
| R2 | 151.01 |
| R1 | 150.62 |
| Daily Pivot | 149.93 |
| S1 | 149.54 |
| S2 | 148.85 |
| S3 | 148.45 |