USDJPY Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | -0.27% | -40 Pips |  |
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| Week to-date | 0.09% | 13.5 Pips |  |
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| December | -0.75% | -114.1 Pips |  |
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Upcoming key events (London Time)
Fri 01:30 PM USD Nonfarm Payroll Employment
What happened lately
In Japan, the Monthly Labour Survey has indicated a reduction in total cash earnings, which dropped to 2.6% in October from the previous 2.8% recorded in September, as per data from the Ministry of Health, Labour and Welfare (MHLW). This decrease suggests a slight easing in wage growth, which may signal a moderation in consumer spending power and potentially hint at subdued inflationary pressures. With income growth slowing, there could be implications for domestic demand and economic recovery efforts, as wages are critical for boosting consumption in the economy. As earnings play a pivotal role in consumer sentiment, this downward trend could catch the attention of policymakers and investors monitoring Japan’s economic health.
Meanwhile, in the United States, economic indicators have shown varied results. Initial Unemployment Insurance Claims increased to 224,000 in the week ending November 30, up from 215,000, as reported by the Department of Labor. This rise in unemployment claims can be reflective of some softening in the labor market conditions. However, suggesting resilience in the manufacturing sector, the Census Bureau reported that new orders for manufactured goods rose by 0.2% in October, recovering from a 0.2% decline in September. The mixed economic signals reveal complexities within the U.S. economy and may require balanced approaches in policy adjustments. The strength exhibited in manufacturing might counterbalance some labor market concerns.
Regarding the USDJPY currency pair, the reported economic figures and upcoming events play a critical role in determining market dynamics. The decrease in Japan’s cash earnings might weaken the yen as a softer domestic economy could hinder foreign investments. Conversely, the increase in U.S. unemployment claims might have put some downside pressure on the U.S. dollar, but the pickup in manufacturing orders may offset this to some extent. These mixed economic signals in the U.S. appear to have led to some hesitation among traders, contributing to a slight fall in the USDJPY exchange rate by -0.27% to 150.04. Moreover, the anticipation of the high-impact Nonfarm Payroll Employment data release from the U.S. could bring further volatility and swing trader sentiment significantly. Speculators and investors will keep a keen eye on these figures, anticipating how they could impact the future monetary policy direction of the Federal Reserve.
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What can we expect from USDJPY today?
USDJPY on Thursday dropped -0.27% to 150.04. Price is below 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 149.56 (S1) with break below could see further selling pressure towards 149.08 (S2). To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 150.70 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 149.65 would indicate selling pressure.
For the week to-date, take note that USDJPY is mixed as compared to prior week.
Key levels to watch out:
| R3 | 151.65 |
| R2 | 151.17 |
| R1 | 150.6 |
| Daily Pivot | 150.13 |
| S1 | 149.56 |
| S2 | 149.08 |
| S3 | 148.51 |