USDJPY Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | 0.09% | 13.3 Pips |  |
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| Week to-date | 0.47% | 70 Pips |  |
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| March | -0.82% | -123.5 Pips |  |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In the United States, recent data indicates a downward revision in interest rate projections. The Federal Reserve has adjusted the interest rate projections for the first year down to 3.4% from a prior 3.9%, with a similar downward adjustment to 3.9% from a previous 4.4% in other components. Additionally, projections for the second year have been revised downward to 3.1% from 3.4%. However, longer-term interest rate projections remain unchanged at 3%. The Federal Funds Rate decision remains steady at 4.5%. These adjustments point to a more cautious approach by the Federal Reserve, potentially anticipating softer economic conditions or aiming to support growth and stabilize inflation.
In Japan, the economic data reflects a significant improvement in the trade balance. The Adjusted Merchandise Trade Balance for February has increased to a positive 182.3 billion yen from a negative 856.6 billion yen recorded in January, and the overall Merchandise Trade Balance Total has surged to 584.5 billion yen from January’s negative 2,758.8 billion yen. This improvement is attributed to a substantial rise in exports, which increased by 11.4% in February compared to a revised 7.3% in January. Conversely, imports have decreased to -0.7% in February from a revised 16.2% in January. These figures suggest a bolstered export environment possibly driven by global demand, alongside a reduction in import expenses.
The implications of these economic developments on the USDJPY currency pair are notable. The United States’ decision to maintain its Federal Funds Rate and lower interest rate projections could signal a dovish stance, typically leading to a weaker dollar. Meanwhile, Japan’s improved trade balance, driven by increased exports and reduced imports, signals strength in its economy, potentially supporting a stronger yen. Despite these expectations, USDJPY rose by 0.09% to 149.36, indicating a consolidation phase. This suggests that market participants are weighing these macroeconomic factors, with no immediate major events to sway the sentiment significantly. The combined effect of these factors may lead to a period of range-bound movement as traders await further economic indicators.
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What can we expect from USDJPY today?
USDJPY on Wednesday rose 0.09% to 149.36. Price is above 9-Day EMA while Stochastic is rising.
Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 149.2 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 149.48 or trades above daily pivot 149.34. While to the downside, the daily low of 149.18 and 149.2 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A break above 149.48 would suggest bullish bias after recent positive movement.
For the week to-date, take note that USDJPY is bullish as the pair continued to trade higher and is up by 0.47% over the past few days.
Key levels to watch out:
| R3 | 149.8 |
| R2 | 149.64 |
| R1 | 149.5 |
| Daily Pivot | 149.34 |
| S1 | 149.2 |
| S2 | 149.04 |
| S3 | 148.9 |