USDJPY Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | 0.08% | 12.401 Pips |  |
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| Week to-date | -1.71% | -263.4 Pips |  |
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| November | -0.31% | -46.8 Pips |  |
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Upcoming key events (London Time)
Thu 11:30 PM JPY Tokyo CPI excluding fresh food and energy (12-mth)
What happened lately
In Japan, the economic data from October reflects a mixed scenario, according to the Ministry of Economy, Trade and Industry. Large retailer sales showed a decline to -1% from 2% in September. However, retail trade saw an increase with the seasonal adjustment indicating a slight growth of 0.1% from September’s -2.3%. The annual retail trade growth also improved significantly to 1.6% from 0.5% in September. Further supporting this positive trend, the 12-month retail trade similarly rose to 1.6%. Meanwhile, the unemployment rate slightly increased to 2.5% in October from 2.4% in September as reported by the Statistics Bureau of Japan. In terms of inflation, Tokyo’s Consumer Price Index (CPI) excluding fresh food and energy saw an increase from 1.8% in October to 2.2% in November, mirroring the overall Tokyo CPI which rose from 1.8% to 2.6%.
In the United States, the economic indicators portray certain challenges. According to the Bureau of Economic Analysis, consumer spending or personal consumption expenditures (PCE) saw a minor decrease to 0.4% in October 2023 from 0.5% in September. Personal income, however, demonstrated improvement with an increase to 0.6% from 0.3% in September. The PCE price index excluding food and energy remained unchanged at a monthly level but rose slightly on a 12-month basis from 2.7% to 2.8%. Pending home sales faced a significant decline from 7.4% in September to 2% in October. The Chicago Purchasing Managers’ Index also decreased to 40.2 points in November from 41.6 points in October, reflecting weaker industrial activity. Durable goods orders excluding transportation declined to 0.1% in October from a revised 0.5% figure in September. However, there was a slight improvement in overall durable goods orders which saw a growth of 0.2%.
The movement in USDJPY is influenced by contrasting economic indicators from both countries. Japan’s slight retail improvement and rising inflation indicate some economic recovery, which could bolster the yen. However, the slight increase in unemployment and shrinking large retailer sales might offset this strength. On the other hand, the U.S. economy is signaling potential weaknesses in consumer spending and manufacturing activity, which could exert downward pressure on the U.S. dollar. These factors combined might result in a range-bound USDJPY, as observed with its narrow rise of 0.08% to 151.52. Market participants will likely keep an eye on upcoming data, including Tokyo CPI figures, for further direction.
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What can we expect from USDJPY today?
USDJPY on Thursday rose 0.08% to 151.52. Price is below 9-Day EMA while Stochastic is falling.
Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 151.22 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 151.95 or trades above daily pivot 151.58. While to the downside, the daily low of 151.28 and 151.22 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A break above 151.95 would suggest bullish bias after recent positive movement.
For the week to-date, take note that USDJPY is bearish as the pair posted lower by -1.71%.
Key levels to watch out:
| R3 | 152.56 |
| R2 | 152.26 |
| R1 | 151.89 |
| Daily Pivot | 151.58 |
| S1 | 151.22 |
| S2 | 150.91 |
| S3 | 150.54 |