Usdjpy rises 0.24% to 148.06 amid mixed US and Japan economic data

USDJPY Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0.24%	35.1 Pips
Week to-date	0.03%	4.7 Pips
March	-1.65%	-248 Pips

Upcoming key events (London Time)

Thu 12:30 PM USD PPI excluding Food and Energy sectors (12-mth)
Fri 02:00 PM USD Index of Consumer Sentiment

What happened lately

In the United States, February witnessed a significant drop in the Monthly Treasury Budget Statement, plummeting to a deficit of $307 billion from January’s $129 billion. Meanwhile, consumer prices showed a mild reprieve as the U.S. CPI Inflation Rate for the 12-month duration decreased to 2.8% in February from 3% in January. On a monthly basis, CPI inflation dipped to 0.2% from the previous 0.5%. Excluding volatile sectors such as food and energy, the CPI inflation rate also decreased marginally over a 12-month period, reaching 3.1% from 3.3%; similarly, the one-month assessment dipped from 0.4% to 0.2%. In the employment sector, the Job Openings and Labor Turnover Survey (JOLTS) disclosed a rise in job openings to 7.74 million in January, up from the December’s revised figure of 7.508 million, suggesting a robust labor market.

On the Japanese front, data revealed a mixed economic performance. Japan’s GDP Deflator for the fourth quarter over a 12-month span witnessed an incremental rise to 2.9% from the previous quarter’s 2.8%. However, Japan’s GDP growth in the fourth quarter reflected a downturn, decreasing to 2.2% from the previous 2.8% observed in the third quarter. In quarterly terms, GDP growth slumped to 0.6%, just below the 0.7% from Q3. This indicates possible economic challenges as Japan’s growth trajectory appears to be losing momentum despite a slight inflationary rise.

The impact of these economic indicators on the USDJPY currency pair shows potential volatility. The rise in job openings in the U.S. could provide support for the dollar, strengthening it against the yen. On the other hand, the narrowing inflation in the U.S. suggests moderated price pressures which could influence Federal Reserve’s stance on interest rates, potentially applying some downward pressure on the dollar. Meanwhile, Japan’s slower GDP growth might weaken the yen, possibly pushing USDJPY higher. As of Wednesday, USDJPY rose 0.24% to 148.06, entering a phase of consolidation, with potential influences coming from upcoming U.S. data on PPI and consumer sentiment, which hold the capacity to steer the pair in the near term.

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What can we expect from USDJPY today?

USDJPY on Wednesday rose 0.24% to 148.06. 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 147.8 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 148.15 or trades above daily pivot 147.97. While to the downside, the daily low of 147.71 and 147.8 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A break above 148.15 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: