USDJPY Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | 0.49% | 72.5 Pips |  |
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| Week to-date | 0.35% | 51.6 Pips | |
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| February | -3.48% | -540.4 Pips |  |
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Upcoming key events (London Time)
Thu 11:30 PM JPY Tokyo CPI (Inflation Rate) (12-mth) Thu 11:30 PM JPY Tokyo CPI excluding fresh food and energy (12-mth)
Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)
What happened lately
In Japan, economic indicators for January and February presented a mixed picture. Large Retailer Sales increased to 4% in January, up from 3% in December, suggesting a rise in consumer spending. The Retail Trade seasonal adjustment improved to 0.5% in January from a previous decline, and on a 12-month basis, climbed to 3.9%. These positive Retail Trade figures indicate a potential boost in economic activity. However, inflation trends showed moderation, with the Tokyo Consumer Price Index (CPI) excluding fresh food and energy decreasing to 2.2% in February from 2.5% in January. Overall inflation in Tokyo fell to 2.9% in February from 3.4% in January, indicating easing inflationary pressures.
In the United States, January’s economic data revealed areas of concern, especially in the housing market, where Pending Home Sales dropped by -4.6% and New-Home Sales Change fell by -10.5%. Durable Goods Orders excluding Transportation remained stagnant at 0%, although Nondefense Capital Goods Orders excluding Aircraft saw a rise to 0.8%. In contrast, overall Durable Goods Orders surged by 3.1% in January, a recovery from December’s decline. Inflation indicators presented a slight rise, with the quarterly PCE Price index and GDP Price Index increasing modestly in the Q4 flash estimate. Initial Unemployment Claims for the week ending 22 February rose to 242K, indicating potential softening in the labor market.
The news is likely to influence USDJPY movements. Despite a slight contraction in some U.S. economic indicators, the overall rise in Durable Goods Orders and stable GDP growth may underpin support for the USD. On the other hand, Japan’s retail sales have strengthened, yet declining inflation could imply less urgency for policy tightening by the Bank of Japan. Consequently, USDJPY movements could be buffered by contrasting monetary expectations and economic performance between the two nations. The slight rise in USDJPY to 149.80 could partially reflect the ongoing consolidation with potential for further fluctuations depending on upcoming high-impact economic releases for both USD and JPY. Traders may closely watch the upcoming PCE Price Index in the U.S. and Tokyo CPI readings in Japan, as they may provide further direction for USDJPY.
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What can we expect from USDJPY today?
USDJPY on Thursday rose 0.49% to 149.80. Price is below 9-Day EMA while Stochastic is rising.
Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 148.97 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 150.16 or trades above daily pivot 149.57. While to the downside, the daily low of 148.74 and 148.97 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A break above 150.16 would suggest bullish bias after recent positive movement.
For the week to-date, take note that USDJPY is mixed as compared to prior week.
Key levels to watch out:
| R3 | 151.82 |
| R2 | 150.99 |
| R1 | 150.4 |
| Daily Pivot | 149.57 |
| S1 | 148.97 |
| S2 | 148.15 |
| S3 | 147.55 |