USDJPY on Friday rose 0.5% to 150.54. Week ending 2025-02-28 rose 0.86%. What happened.

USDJPY Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.5%	74.4 Pips
Week 252025-02-28	0.86%	128.3 Pips
February	-2.99%	-463.7 Pips

Upcoming key events for the new week (London Time)

Wed 12:30 AM Bank of Japan Governor Kazuo Ueda speech
Fri 01:30 PM Nonfarm Payroll Employment
Fri 01:30 PM Average Hourly Earnings (12-mth)

What happened over the week

The U.S. economy in January showed mixed signals. Personal consumption expenditure (PCE) Price Index remained steady at 0.3%, while the core PCE, excluding food and energy, rose to 0.3%, hinting at subtle inflation. However, on a 12-month scale, the overall PCE index slightly decreased to 2.5% from 2.6%, showing some moderation in price pressures. Personal income surged to 0.9%, suggestive of potential consumer spending capacity despite a drop in consumer spending to -0.2%. Durable goods orders showed a significant rebound, with overall new orders up by 3.1% in January and orders excluding defense increasing by 3.5%, reflecting strong manufacturing demand. Initial unemployment claims rose to 242K, indicating potential softening in the labor market. Overall, the data presents a mix of subdued inflation and robust manufacturing, with a cautious note on consumption and employment.

In Japan, economic indicators in January appeared more optimistic. Retail sales maintained growth, with large retailer sales rising to 4%, and retail trade showing seasonally adjusted growth of 0.5% from a previous decline. On a broader year-over-year basis, retail trade increased to 3.9%. Conversely, inflation showed signs of easing with Tokyo’s Consumer Price Index (CPI), excluding fresh food and energy, and the overall inflation rate decreasing in February. This suggests that inflationary pressures are calming, providing some relief for consumers after previous highs. These trends imply a stable growth outlook with weakening inflation for Japan.

Regarding the USDJPY currency pair, the recent economic data points from both the U.S. and Japan have influenced its condition. The U.S. data, with rising personal income and robust manufacturing contrasted with weak consumer spending, suggest an underlying economic strength which could support the U.S. dollar. Meanwhile, Japan’s steady retail activity coupled with easing inflation may not provide sufficient counterbalance to dollar strength, posing a tendency for USD appreciation against the JPY. The USDJPY ended up strengthening by 0.5% to 150.54000 after rebounding from a 4-month low. Looking ahead, high-impact events such as speeches from Bank of Japan Governor Kazuo Ueda and U.S. nonfarm payrolls data can provide further directionality for the pair, with potential for heightened volatility and opportunities based on emerging economic narratives from both economies.

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 rose 0.5% to 150.54. Price is above 9-Day EMA while Stochastic is rising. For the week ending ,2025-02-28, the pair rose 0.86% or 128.3 pips higher. USDJPY hit 4-month low but rebound to end week higher.

Looking ahead, USDJPY looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook is mixed. To see upside interest, we prefer to look at price breakout of week high of 150.99 or at least consolidates above Weekly Pivot level of 150.03. On the downside, we are looking at week low 148.56 or 149.07 (WS1) as immediate support level. USDJPY need to break on either side to indicate a short-term bias. A break above 150.99 would suggest bullish bias after recent positive movement.

For the month of February, USDJPY is down by -2.99% or -463.7 pips lower.

Weekly key levels to watch out:

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Advance Retail Inventories Source: Census Bureau
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Gross Domestic Product, 4th Quarter and Year 2024 (Second Estimate) Source: Bureau of Economic Analysis
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Trade Statistics (First 10 Days of February 2025 [Provisional]) Source: Ministry of Finance
Minutes of the Board’s discount rate meetings on January 21 and 29, 2025 Source: Federal Reserve