USDJPY Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | -0.63% | -95.6 Pips |  |
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| Week to-date | 1.42% | 212.999 Pips |  |
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| October | 5.58% | 801.999 Pips |  |
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Upcoming key events (London Time)
Fri 12:30 AM JPY Tokyo CPI (Inflation Rate) (12-mth) Fri 12:30 AM JPY Tokyo CPI excluding fresh food and energy (12-mth)
What happened lately
The Tokyo Consumer Price Index (CPI) in Japan, excluding fresh food, witnessed a decrease from 2% in September to 1.8% in October, as reported by the Statistics Bureau of Japan. However, when both fresh food and energy were excluded, the CPI showcased a different trajectory, climbing from 1.6% to 1.8% during the same period. This divergence indicates a multifaceted consumer price environment where core inflation metrics are experiencing an uptick, albeit the broader index shows some easing. This balance reflects complex dynamics in the Japanese economy, possibly due to varying contributions from different sectors and consumer goods.
Turning to the United States, the housing market displayed signs of resilience in September, with new-home sales increasing by 4.1%, a recovery from a previously reported decline. The revised figures for August present an improvement to a less steep decline of 2.3% compared to the initial 4.7% decrease. This bounce-back suggests robust underlying demand in the housing sector amidst fluctuating economic conditions. Moreover, the labor market remains robust as U.S. Initial Unemployment Insurance Claims fell to 227,000 in the week ending 19 October, down from 242,000. A consistently healthy job market underscores economic buoyancy, signaling consumer confidence and stability.
Considering these economic indicators, the USDJPY currency pair experienced a 0.63% decline to reach 151.69. The drop was influenced by contrasting economic indicators from the U.S. and Japan. The improvement in U.S. new-home sales and lowering unemployment claims hint at a strengthening economy, possibly supporting a stronger dollar. However, Japan’s mixed inflation signals showcase a nuanced picture that may reduce the yen’s weakness. The interplay of these economic conditions has affected the currency pair dynamics. Upcoming high-impact events such as the Tokyo CPI report are likely to further influence future movements. Traders and policymakers will pay close attention to these inflation metrics, which could introduce additional volatility to the USDJPY pairing.
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What can we expect from USDJPY today?
USDJPY on Thursday dropped -0.63% to 151.69. Price is above 9-Day EMA while Stochastic is rising.
Updated daily direction for USDJPY looks bearish as the pair posted lower in Thursday trading session.
Looking ahead for the day, immediate support level is at 151.23 (S1) with break below could see further selling pressure towards 150.76 (S2). To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 152.80 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 151.55 would indicate selling pressure.
For the week to-date, take note that USDJPY is bullish as the pair continued to trade higher and is up by 1.42% over the past few days.
Key levels to watch out:
| R3 | 153.73 |
| R2 | 153.27 |
| R1 | 152.48 |
| Daily Pivot | 152.01 |
| S1 | 151.23 |
| S2 | 150.76 |
| S3 | 149.97 |