USDJPY Analysis
| Performance after Monday | |||||
| Period | Pct | Chg | Momentum | ||
| Monday | 1.61% | 235.199 Pips |  |
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| Week to-date | -1.04% | -152.1 Pips |  |
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| April | -3% | -450.5 Pips | |
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Upcoming key events (London Time)
Wed 07:00 PM USD FOMC Meeting Minutes
What happened lately
In February, Japan experienced a notable improvement in its current account balance, which grew to 4060.7 billion yen, a significant increase from the deficit of 257.6 billion yen recorded in January. This rebound in Japan’s current account suggests a stronger position in foreign trade and capital investment, reflecting solid economic activity and possibly increased exports or a reduction in imports. The improvement in the current account is generally a positive economic signal, indicating a surplus which implies that the nation is saving more than it is spending abroad, thus boosting its financial stability. This development can cultivate a more stable yen by underpinning the demand for it as Japanese exporters repatriate profits back to their home currency.
On the other hand, the USDJPY currency pair saw a movement where the yen weakened against the dollar, leading USDJPY to rise by 1.61% to 148.04. This upward movement of USDJPY suggests that despite the improvement in Japan’s current account balance, other factors are at play influencing the exchange rate. These factors could include the divergence in monetary policies between Japan and the US, where interest rates are a crucial element. As Japan continues with its loose monetary policy, and the US potentially tightens or maintains higher interest rates, the appeal for the dollar increases, thereby strengthening it against the yen.
Looking ahead, a significant event that could further impact the USDJPY direction is the release of the FOMC Meeting Minutes in the US. This release, scheduled for Wednesday, holds a high impact potential as it might provide insights into future Federal Reserve policy directions. If the minutes suggest a hawkish stance with potential rate hikes or ongoing inflation concerns, the dollar could strengthen further, placing more pressure on the yen and possibly pushing the USDJPY higher. Conversely, if dovish signals are noted, indicating rate stalls or cuts, the yen could gain some strength against the dollar, potentially leading to a pullback in the USDJPY pair.
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What can we expect from USDJPY today?
USDJPY on Monday rose 1.61% to 148.04. Price is below 9-Day EMA while Stochastic is rising in oversold zone.
Updated daily direction for USDJPY looks bullish as the pair ended higher after Monday trading session.
Looking ahead for the day, immediate upside resistance level is R1 at 149.1 with break above could target R2 at 150.16. While towards the downside, we are looking at daily low of 145.07 as an important support. Break below this level could weaken the current bullish momentum. 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:
| R3 | 152.18 |
| R2 | 150.16 |
| R1 | 149.1 |
| Daily Pivot | 147.08 |
| S1 | 146.02 |
| S2 | 144 |
| S3 | 142.94 |