USDJPY Analysis
| Week Ending 242024-12-27 | |||
| Open | High | Low | Close |
| 157.16 | 158.07 | 146.20 | 157.87 |
| Performance | |||||
| Period | Pct | Chg | Momentum | ||
| Friday | 0.08% | 11.9 Pips |  |
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| Week 242024-12-27 | 0.85% | 133.399 Pips | |
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| December | 4.43% | 669.3 Pips |  |
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Upcoming key events for the new week (London Time)
Tue 03:00 PM New Year’s Day
Wed 05:00 AM New Year’s Day
What happened over the week
Japan’s economic data for November and December shows an overall positive trend. Large retailer sales increased by 3% in November, up significantly from the previous month’s decline of 1%, according to the Ministry of Economy, Trade and Industry (METI). Meanwhile, Japan’s 12-month retail trade rose to 2.8% in November from a revised 1.3% in October. Retail trade, seasonally adjusted for one month, also climbed to 1.8% from 0.1% in October, indicating a strengthening consumer sector. Additionally, Japan’s Tokyo Consumer Price Index (CPI) reflecting the inflation rate, rose to 3% in December from 2.6% in November, with the core CPI (excluding fresh food and energy) increasing to 2.4% from 2.2%. However, the unemployment rate remained steady at 2.5% as reported by the Statistics Bureau of Japan.
On the other hand, the U.S. witnessed mixed data in November. The initial unemployment insurance claims from the Department of Labor slightly decreased to 219,000 from 220,000. However, durable goods new orders fell by 1.1%, a stark contrast to October’s revised increase of 0.8% as per the Census Bureau. Durable goods orders, excluding transportation, fell by 0.1%. Conversely, nondefense capital goods orders, excluding aircraft, increased by 0.7%, revealing some optimism in business investments.
The recent movements in USDJPY suggest a strengthening of the US dollar against the Japanese yen. The rise to 157.87 is influenced by economic data demonstrating mixed signals from both Japan and the U.S. The increase in Japan’s retail trade and inflation might suggest future hikes in interest rates, potentially strengthening the yen. However, the current USDJPY rate reflects a stronger USD, supported by a decrease in U.S. unemployment claims and an increase in capital goods orders. Looking ahead, the holiday season and upcoming New Year’s Day holidays may lead to reduced trading volumes, limited volatility, or abrupt movements in USDJPY, as traders adjust their positions in anticipation of the New Year economic forecasts and potential policy shifts. The pair’s recent high marks a fourth consecutive week of gains, suggesting a bullish sentiment for USDJPY leading into the new year.
From social media
Japanese retail sales increased 1.8% MoM in November, the largest monthly increase since September 2021. Annual retail sales growth was 2.8% YoY, a three month high.
Wholesale sales were flat on the month and up 4.0% YoY. Service sector sales were down -12.3% YoY to the lowest… pic.twitter.com/gIA7re6X1r
— MTS Insights (@MTSInsights) December 27, 2024
What can we expect from USDJPY for the new week and what happened on Friday?
USDJPY on Friday rose 0.08% to 157.87. Price is above 9-Day EMA while Stochastic is rising in overbought zone. For the week ending ,2024-12-27, the pair rose 0.85% or 133.399 pips higher. USDJPY hit record-extending 5-month high and rose for the fourth-straight week amid Christmas holiday.
Looking ahead, USDJPY looks mixed as the pair is likely to consolidate above week low of 146.20.
For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 158.07 or at least consolidates above Weekly Pivot level of 154.05. On the downside, we are looking at week low 146.20 or 150.02 (WS1) as immediate support level. USDJPY need to break on either side to indicate a short-term bias. A break above 158.07 would suggest bullish bias after recent positive movement.
For the month of December, USDJPY is up by 4.43% or 669.3 pips higher.
Weekly key levels to watch out:
| R3 | 173.77 |
| R2 | 165.92 |
| R1 | 161.89 |
| Weekly Pivot | 154.05 |
| S1 | 150.02 |
| S2 | 142.18 |
| S3 | 138.15 |
You might also be interested in:
Advance Retail Inventories Source: Census Bureau Advance U.S. International Trade in Goods Source: Census Bureau Advance Wholesale Inventories Source: Census Bureau
Summary of Opinions at the Monetary Policy Meeting on December 18 and 19, 2024 Source: Bank of Japan Trade Statistics (First 10 Days of December 2024 [Provisional]) Source: Ministry of Finance New Home Sales Source: Census Bureau Minutes of the Monetary Policy Meeting on October 30 and 31, 2024 Source: Bank of Japan Advance Monthly Manufacturers’ Shipments, Inventories, and Orders Source: Census Bureau