USDJPY on Friday dropped -0.11% to 150.05. Week ending 2024-12-06 rose 0.1%. What happened.

USDJPY Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.11%	-15.8 Pips
Week 242024-12-06	0.1%	15.1 Pips
December	-0.74%	-112.5 Pips

Upcoming key events for the new week (London Time)

Wed 01:30 PM CPI Inflation Rate (12-mth)
Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM PPI excluding Food and Energy sectors (12-mth)

What happened over the week

In the United States, consumer sentiment showed an improvement with the Index of Consumer Sentiment rising to 74 points in December, compared to 71.8 points in November, as reported by the University of Michigan. However, the Index of Consumer Expectations witnessed a slight decline to 3.1% down from 3.2% in the previous month. According to the Bureau of Labor Statistics, the labor market presented mixed signals: Nonfarm Payroll Employment saw a significant increase to 227K in November, up from a revised figure of 36K in October. Furthermore, the unemployment rate edged up to 4.2% from 4.1% in October, signaling slight labor market tightening. Average Hourly Earnings saw an annual increase of 4% in November, unchanged from October, while on a monthly basis earnings remained steady at 0.4%. Initial Unemployment Insurance Claims rose to 224K for the week ending November 30, highlighting potential stress in the labor force. U.S. new orders for manufactured goods grew slightly by 0.2% in October, reversing a decline of -0.2% in September, indicating a gradual recovery in manufacturing activity, as per the Census Bureau.

In Japan, the Monthly Labour Survey released by the Ministry of Health, Labour and Welfare (MHLW) indicated that total cash earnings showed a decline in growth, dropping to 2.6% in October from 2.8% in September. This suggests some deceleration in wage growth, reflecting mild stagnation in labor market conditions.

Regarding the USDJPY exchange rate, the U.S. dollar experienced volatility, dropping by 0.11% to 150.05000 on Friday yet ending the week slightly higher by 0.1%. The U.S. labor market data, particularly the rising unemployment claims and unemployment rate despite increased nonfarm payrolls, alongside robust consumer sentiment, portrays a mixed economic outlook. As a result, USD strength may be tempered, causing USDJPY to face downward pressure. However, the anticipated inflation data in the coming weeks, particularly the Consumer Price Index (CPI) and Producer Price Index (PPI), could provide further direction, as high-impact economic indicators. This could either reinforce a stronger USD if inflation remains persistent or prompt weakness should inflationary pressures ease, influencing the currency pair’s movement accordingly.

From social media

🇯🇵 In October, Japan's Monthly Labour Survey reported a decrease in total cash earnings (12-month) to 2.6% from the previous 2.8% in September.https://t.co/YGD38vwZUR

— Market Recap (@forexforum) December 8, 2024

What can we expect from USDJPY for the new week and what happened on Friday?

USDJPY on Friday dropped -0.11% to 150.05. Price is below 9-Day EMA while Stochastic is rising. For the week ending ,2024-12-06, the pair rose 0.1% or 15.1 pips higher.

Looking ahead, USDJPY looks mixed as the pair is likely to consolidate above week low of 148.65.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 151.22 or at least consolidates above Weekly Pivot level of 149.97. On the downside, we are looking at week low 148.65 or 148.73 (WS1) as immediate support level. USDJPY need to break on either side to indicate a short-term bias. A break above 151.22 would suggest bullish bias after recent positive movement.

For the month of December, USDJPY is down by -0.74% or -112.5 pips lower.

Weekly key levels to watch out:

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