USDJPY Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | -0.7% | -107.7 Pips |  |
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| Week to-date | -2.06% | -320.9 Pips | |
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| February | -1.01% | -156.2 Pips |  |
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Upcoming key events (London Time)
Fri 01:30 PM USD Nonfarm Payroll Employment
What happened lately
In Japan, the latest monthly labor survey indicates a positive development in total cash earnings, which rose by 4.8% in December, up from 3% in November. This increase suggests that Japanese workers are receiving higher compensation as compared to the previous month, reflecting a bolstering of consumer purchasing power and potentially contributing to inflationary pressures. This can be a sign that the Japanese economy might be gradually recovering, bolstered by increased wages, which can lead to increased consumption and an overall boost in economic activity.
Conversely, economic indicators from the United States paint a more subdued picture for December. The Job Openings and Labor Turnover Survey (JOLTS) reported a significant decrease in job openings, which fell to 7.6 million from 8.156 million in November. This reduction signifies a contraction in demand for labor, which could signal cooling economic activity. Additionally, new orders for manufactured goods also experienced a decline, dropping by 0.9% following a slight decrease of 0.4% in the previous month. This marks a continuation of the downtrend, further indicating a slowdown in manufacturing and economic activity in the U.S.
The juxtaposition of Japan’s improving earnings with the U.S.’s declining job openings and manufacturing orders can affect the USDJPY currency pair dynamically. A stronger Japanese economy could support the yen, leading to pressure on USDJPY to decline. On the other hand, a weak U.S. economic performance tends to dampen investor sentiment for the U.S. dollar, exacerbating the USDJPY’s downward trend as seen with its drop of 0.7% to 152.51. The impending release of the U.S. Nonfarm Payroll Employment could introduce further volatility and if it points to further weakness, the yen could gain more ground against the dollar in the short term.
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What can we expect from USDJPY today?
USDJPY on Wednesday dropped -0.7% to 152.51. Price is below 9-Day EMA while Stochastic is falling.
Updated daily direction for USDJPY looks bearish as the pair posted lower in Wednesday trading session.
Looking ahead for the day, immediate support level is at 151.63 (S1) with break below could see further selling pressure towards 150.74 (S2). To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 154.36 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 152.11 would indicate selling pressure.
For the week to-date, take note that USDJPY is bearish as the pair posted lower by -2.06%.
Key levels to watch out:
| R3 | 156.13 |
| R2 | 155.24 |
| R1 | 153.88 |
| Daily Pivot | 152.99 |
| S1 | 151.63 |
| S2 | 150.74 |
| S3 | 149.38 |