USDJPY on Friday dropped -0.03% to 157.32. Week ending 2025-01-03 moved lower by -0.35%. What happened.

USDJPY Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.03%	-4.5 Pips
Week 252025-01-03	-0.35%	-55.6 Pips
January	0.21%	32.201 Pips

Upcoming key events for the new week (London Time)

Wed 07:00 PM FOMC Meeting Minutes
Fri 01:30 PM Nonfarm Payroll Employment

What happened over the week

In the United States, the recent economic data showed improvements and slight adjustments. The Initial Unemployment Insurance Claims reported by the Department of Labor fell to 211,000 for the week ending December 28, marking a decrease from the previous figure, which was revised up to 220,000 from an initially reported 219,000. This suggests that fewer people are claiming unemployment benefits, indicating a strengthening labor market. Meanwhile, from the Federal Housing Finance Agency (FHFA), the House Price Index for October experienced a decline to 0.4% compared to the 0.7% growth seen in the previous month, hinting at a cooling in the housing market’s price inflation.

In Japan, the currency market saw the USDJPY pair fluctuate over the recent period. On Friday, USDJPY fell slightly by 0.03% to 157.32000, and for the week ending January 3, it decreased by 0.35%. Despite these short-term declines, USDJPY finished December with a gain of 4.9%, marking a five-month high, the most elevated level since mid-July 2024. Across the entire year of 2024, the USDJPY rose by 11.4%, which represents the fourth consecutive year of increases. This persistent upward trend reflects broader economic and monetary policy dynamics that have been influencing the currency pair.

The movements in the USDJPY exchange rate are indicative of various economic forces at play. The reduction in unemployment claims in the United States suggests a potentially robust labor market, which could lead to increased investor confidence in the U.S. economy and therefore support the dollar. However, the small decrease in the house price index may temper this optimism slightly by signaling slower growth in housing-related investments. The upcoming Federal Open Market Committee (FOMC) Meeting Minutes and Nonfarm Payroll Employment report are pivotal events that could further influence USDJPY. These high-impact economic indicators may provide clarity on the future direction of U.S. monetary policy, and positive news could reinforce the dollar’s recent strength, while any signs of economic slowdown might contribute to weakening. Overarchingly, these dynamics help explain the recent fluctuations in the USDJPY and set the stage for further developments as economic data continues to emerge.

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 dropped -0.03% to 157.32. Price is above 9-Day EMA while Stochastic is falling in overbought zone. For the week ending ,2025-01-03, the pair dropped -0.35% or -55.6 pips lower. USDJPY ended December up by 4.9% and hit record-extending 5-month high, highest level since 2024-07-17. For the year 2024, USDJPY ended the year higher by 11.4% for the fourth straight yearly increase.

Looking ahead, USDJPY looks mixed as the pair is likely to consolidate above week low of 156.04.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 157.76 or at least consolidates above Weekly Pivot level of 157.04. On the downside, we are looking at week low 156.04 or 156.32 (WS1) as immediate support level. USDJPY need to break on either side to indicate a short-term bias. A close below week low of 156.04 would indicate selling pressure.

For the month of January, USDJPY is up by 0.21% or 32.201 pips higher.

Weekly key levels to watch out:

You might also be interested in:

Construction Spending Source: Census Bureau