USDJPY Analysis
| Performance after Tuesday | |||||
| Period | Pct | Chg | Momentum | ||
| Tuesday | -0.52% | -80.8 Pips |  |
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| Week to-date | -0.91% | -141.3 Pips |  |
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| February | 0.15% | 23.4 Pips |  |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
Japan’s economic data for December reveals a significant upturn in labor conditions, with the Monthly Labour Survey indicating an increase in Total Cash Earnings, rising to 4.8% on a 12-month basis from November’s 3%. This advancement suggests positive momentum in Japan’s labor market, potentially sparking improved consumer confidence and spending. Such an increase in earnings reflects better wage growth, which can stimulate the broader economy by enhancing consumer purchasing power and boosting overall domestic demand.
In the United States, economic indicators presented a less favorable picture for December. The U.S. Job Openings and Labor Turnover Survey (JOLTS) documented a decline in job openings, which decreased from 8.156 million in November to 7.6 million in December. This reduction signifies potential slowing in the labor market, which could exert pressure on employment growth if the trend persists. Additionally, U.S. new orders for manufactured goods experienced a more pronounced decline, decreasing by 0.9% in December following a revised fall of 0.8% in November. This downturn in manufactured orders denotes a slowdown in industrial activity, suggesting that demand may be waning across the manufacturing sector.
Considering the contrasting economic developments in Japan and the United States, it is critical to assess their potential impact on the USDJPY currency pair. With Japan exhibiting stronger labor earnings growth and the U.S. displaying weaker job and manufacturing data, investor sentiment may sway towards the yen as a more favorable option. The existing trend showed the USDJPY pair dropping by 0.52% to 154.32, as traders possibly react to the data by favoring the yen over the dollar. Without significant upcoming events to alter this dynamic, market participants might continue to perceive the yen as a more stable currency amidst uncertainty in the U.S. economic outlook, potentially maintaining pressure on the USDJPY exchange rate.
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What can we expect from USDJPY today?
USDJPY on Tuesday dropped -0.52% to 154.32. Price is below 9-Day EMA while Stochastic is falling.
Updated daily direction for USDJPY looks bearish as the pair posted lower in Tuesday trading session.
Looking ahead for the day, immediate support level is at 153.81 (S1) with break below could see further selling pressure towards 153.31 (S2). To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 155.52 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 154.16 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 | 156.53 |
| R2 | 156.02 |
| R1 | 155.17 |
| Daily Pivot | 154.67 |
| S1 | 153.81 |
| S2 | 153.31 |
| S3 | 152.46 |