USDJPY on Friday dropped -0.42% to 152.34. Week ending 2025-02-14 rose 0.58%. What happened.

USDJPY Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.42%	-64.6 Pips
Week 252025-02-14	0.58%	87.7 Pips
February	-1.89%	-292.8 Pips

Upcoming key events for the new week (London Time)

Mon 05:00 AM Presidents’ Day
Wed 07:00 PM FOMC Meeting Minutes

What happened over the week

In the United States, several key economic indicators were recently reported, reflecting a mixed pictures of the economy. The Monthly Retail Trade for January experienced a decline, falling to -0.9% from the previously revised figure of 0.7%, according to the Census Bureau. This suggests a potential slowdown in consumer spending, a key driver of U.S. economic activity. On the positive side, Initial Unemployment Insurance Claims dropped to 213,000 from a revised figure of 220,000, per the Department of Labor, indicating continued strength in the labor market.

Price pressures showed some increases; the U.S. Producer Price Index (PPI) for January rose to 0.4% from 0.2% in December, with the 12-month PPI also increasing to 3.5% from 3.3%. This upward trend extends to the PPI excluding Food and Energy sectors, which increased to 0.3% from 0% in December and to 3.6% on a 12-month basis. These numbers from the Bureau of Labor Statistics highlight persistent inflationary pressures within the producer sector. The CPI Inflation Rate similarly reflected upward momentum, increasing to 0.5% in January from 0.4% in December, and reaching 3% annually up from 2.9%. The Core CPI Inflation Rate, which excludes food and energy, rose to 0.4% from 0.2%. The Bureau of the Fiscal Service reported a notable increase in the Monthly Treasury Budget deficit, rising to -$129 billion from -$87 billion, signaling fiscal concerns.

The recent economic data, coupled with trader sentiment, may lead to varied effects on the USDJPY currency pair. The stronger-than-expected labor market data supports the dollar, potentially providing bullish momentum against the Japanese yen. However, concerns about retail spending and fiscal deficits alongside persistent inflation may temper enthusiasm for the dollar. Notably, while USDJPY recently rose for the week, it was constrained within the prior week’s trading range, indicating caution among traders. Investors will closely monitor upcoming events such as the FOMC meeting minutes for further guidance, although it is important to consider the holiday impact due to Presidents’ Day. This balanced view of strengths and weaknesses in U.S. data suggests potential volatility in USDJPY movement.

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 dropped -0.42% to 152.34. Price is below 9-Day EMA while Stochastic is falling. For the week ending ,2025-02-14, the pair rose 0.58% or 87.7 pips higher. USDJPY ended 4-straight weekly decline for the first weekly gain in 5 weeks, albeit an inside-bar trading pattern of the prior week range.

Looking ahead, USDJPY looks mixed as the pair is likely to consolidate above week low of 151.16.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 154.80 or at least consolidates above Weekly Pivot level of 152.74. On the downside, we are looking at week low 151.16 or 150.67 (WS1) as immediate support level. USDJPY need to break on either side to indicate a short-term bias. A break above 154.80 would suggest bullish bias after recent positive movement.

For the month of February, USDJPY is down by -1.89% or -292.8 pips lower.

Weekly key levels to watch out:

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Advance Monthly Sales for Retail and Food Services Source: Census Bureau
Review of Monetary Policy from a Broad Perspective (“Experts’ Commentaries” updated) Source: Bank of Japan
Business Formation Statistics Source: Census Bureau
Powell, Semiannual Monetary Policy Report to the Congress Source: Federal Reserve
Balance of Payments, December 2024 (Preliminary) Source: Ministry of Finance