USDJPY on Friday dropped -0.06% to 149.32. Week ending 2025-02-21 moved lower by -1.78%. What you need to know.

USDJPY Analysis

Performance
Period	Pct	Chg	Momentum
Friday	-0.06%	-8.401 Pips
Week 252025-02-21	-1.78%	-269.9 Pips
February	-3.1%	-477.3 Pips

Upcoming key events for the new week (London Time)

Thu 01:30 PM GDP annual rate
Thu 11:30 PM Tokyo CPI (Inflation Rate) (12-mth)
Thu 11:30 PM Tokyo CPI excluding fresh food and energy (12-mth)
Fri 01:30 PM PCE Price Index, excluding food and energy (12-mth)

What happened over the week

In the United States, economic indicators depicted mixed signals. The Index of Consumer Expectations saw a slight increase to 3.5% in January from the previous 3.3% in December, indicating some optimism among consumers. However, the Index of Consumer Sentiment declined to 64.7 points in January from 67.8 points in December, reflecting a decline in overall consumer confidence. The labor market showed slight weakness as initial unemployment insurance claims rose to 219,000, compared to December’s 213,000. The U.S. Manufacturing Business Outlook Survey significantly dropped to 18.1 points from 44.3 points, suggesting a slowdown in manufacturing activity. Building permits slightly increased to 1.483 million, but housing starts dropped to 1.366 million, indicating a potential cooling in the housing market. On a brighter note, the New York Empire State Manufacturing Index improved to 5.7 points, a turnaround from the previous reading of -12.6 points.

In Japan, economic data pointed to accelerating inflation and a substantial rise in trade figures. The national CPI inflation rate, excluding fresh food, rose to 3.2% in January from 3% the previous month. Similarly, the overall CPI inflation rate jumped to 4% from December’s 3.6%, signaling increased pricing pressure. Excluding both food and energy, CPI inflation also climbed slightly from 2.4% to 2.5%. Japan experienced a significant boost in export growth, rising to 7.2% in January from December’s 2.8%, while imports surged to 16.7% from 1.7%. Despite increased trade activities, Japan’s Merchandise Trade Balance fell drastically to -2758.8¥ million from a positive 132.5¥ million, indicating economic challenges in balancing trade.

The USDJPY pair’s decline over the week, reaching an 11-week low, highlights the bearish sentiment surrounding the USD against the JPY. The data from both countries suggest that external factors such as GDP performance and inflation readings could significantly impact future USDJPY movements. With upcoming releases like the U.S. GDP annual rate and Japan’s Tokyo CPI figures, market participants are likely to be attentive, as these data could influence the central banks’ monetary policy decisions. The accelerated inflation in Japan could prompt expectations for a tighter monetary stance from the Bank of Japan, possibly supporting the yen. Conversely, any mixed or weaker-than-expected U.S. economic outcomes could further pressure the USD, potentially extending the decline of the USDJPY pair in the immediate future.

From social media

Japan's National CPI Inflation Rate (12-mth) in January rose to 4%, up from 3.6% in December.https://t.co/NGb1CbSOmt

— Market Recap (@forexforum) February 23, 2025

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

USDJPY on Friday dropped -0.06% to 149.32. Price is below 9-Day EMA while Stochastic is falling. For the week ending ,2025-02-21, the pair dropped -1.78% or -269.9 pips lower. USDJPY extend decline to 11-week low.

Looking ahead, USDJPY looks bearish as the pair posted lower in Friday trading session.

For the new week, our technical outlook looks bearish, immediate support level is at 148.06 (WS1) with break below could see further selling pressure towards 146.81 (WS2). For potential buyers, as the current momentum is bearish, we prefer to look at firm break of the week high of 152.30 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 148.92 would indicate selling pressure.

For the month of February, USDJPY is down by -3.1% or -477.3 pips lower.

Weekly key levels to watch out:

You might also be interested in:

Minutes of the Federal Open Market Committee, January 28-29, 2025 Source: Federal Reserve
New Residential Construction Source: Census Bureau
Speech by Board Member TAKATA in Miyagi (Economic Activity, Prices, and Monetary Policy in Japan) Source: Bank of Japan
Trade Statistics (January 2025 [Provisional]) Source: Ministry of Finance