USDJPY on Friday rose 0.15% to 151.42. Week ending 2025-02-07 moved lower by -2.54%. What you need to know.

USDJPY Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.15%	22.601 Pips
Week 252025-02-07	-2.54%	-394.401 Pips
February	-1.74%	-267.8 Pips

Upcoming key events for the new week (London Time)

Mon 03:00 PM National Foundation Day
Wed 01:30 PM CPI Inflation Rate (12-mth)
Wed 01:30 PM CPI Inflation Rate excluding Food and Energy sectors (12-mth)
Wed 03:00 PM Federal Reserve Chair Jerome Powell testifies
Thu 01:30 PM PPI excluding Food and Energy sectors (12-mth)
Fri 01:30 PM Monthly Retail Trade (1-mth)

What happened over the week

In the United States, the Bureau of Labor Statistics reported a slight decrease in the unemployment rate for January to 4% from December’s 4.1%, suggesting a marginal improvement in labor market conditions. However, nonfarm payroll employment declined sharply to 143,000 from 256,000 in December, indicating a significant slowing in job growth. Despite this, average hourly earnings rose by 0.5% in January from 0.3% in December, with a year-on-year increase from 3.9% to 4.1%, suggesting wage pressures persist. The U-6 Total measure of labor underutilization remained stable at 7.5%. Quarterly data highlighted a sharp increase in unit labor costs for Q4 at 3% from Q3’s 0.8%, while labor productivity fell to 1.2% from 2.2%. Initial unemployment insurance claims rose to 219,000 in early February from the previously revised 207,000, suggesting potential softness in the labor market. Additionally, December saw a decrease in job openings to 7.6 million from November’s revised 8.156 million, alongside a continued decline in new orders for manufactured goods by 0.9%, demonstrating lingering economic challenges.

In Japan, data from the Ministry of Health, Labour and Welfare showed a positive trend with total cash earnings growing by 4.8% in December, a substantial increase from 3% in November. This significant boost in earnings points towards strengthening consumer purchasing power and potential inflationary pressures. The robust earnings increase may signal improving economic conditions in Japan, contrary to the softer labor market indicators observed in the U.S.

The mixed economic signals from the U.S., particularly the slowdown in job growth and manufacturing, combined with increasing wages, could result in varied expectations about Federal Reserve policies, affecting the U.S. dollar’s strength. Meanwhile, the favorable data from Japan may bolster the yen. The combination of these factors might put downward pressure on the USDJPY pair, as recent trends have shown a decline in the exchange rate. However, market participants are likely to closely watch upcoming high-impact U.S. events, including inflation reports and Federal Reserve communications, which could provide further direction. These elements collectively imply there could be volatility in the USDJPY rate in the short term, emphasizing a cautious outlook moving forward.

From social media

Minutes of the Monetary Policy Meeting on December 18 and 19, 2024 https://t.co/Z5TYqnmBYf

— Bank of Japan (@Bank_of_Japan_e) January 28, 2025

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

USDJPY on Friday rose 0.15% to 151.42. Price is below 9-Day EMA while Stochastic is falling. For the week ending ,2025-02-07, the pair dropped -2.54% or -394.401 pips lower. USDJPY hit 8-week low and dropped for the fourth straight week.

Looking ahead, USDJPY looks mixed as the pair is likely to consolidate above week low of 150.92.

For the new week, our technical outlook looks bearish, immediate support level is at 149.73 (WS1) with break below could see further selling pressure towards 148.04 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 155.49 as an important indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below week low of 150.92 would indicate selling pressure.

For the month of February, USDJPY is down by -1.74% or -267.8 pips lower.

Weekly key levels to watch out:

You might also be interested in:

New Home Sales Source: Census Bureau
Trade Statistics (First 20 Days of January 2025 [Provisional]) Source: Ministry of Finance
Rental Vacancy Rate Source: Census Bureau
Housing Vacancies and Homeownership Source: Census Bureau
Speech by Board Member TAMURA in Nagano (Economic Activity, Prices, and Monetary Policy in Japan) Source: Bank of Japan
U.S. International Trade in Goods and Services, December and Annual 2024 Source: Bureau of Economic Analysis
U.S. International Trade in Goods and Services Source: Census Bureau
Manufacturers’ Shipments, Inventories, and Orders Source: Census Bureau
Construction Spending Source: Census Bureau
Summary of Opinions at the Monetary Policy Meeting on January 23 and 24, 2025 Source: Bank of Japan