USDJPY Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | 0.5% | 71.3 Pips |  |
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| Week to-date | -0.77% | -110.8 Pips |  |
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| April | -5.03% | -753.7 Pips | |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In Japan, the national Consumer Price Index (CPI) inflation rate for March showed a slight decrease to 3.6% compared to February’s 3.7%. However, the core CPI inflation rate, which excludes fresh food, increased to 3.2% from the previous 3%. This suggests underlying inflationary pressures persist in the economy despite the overall marginal decrease. Additionally, Japan faced a worsening trade balance with an adjusted merchandise trade deficit increasing to ¥-233.6 billion in March from ¥182.3 billion in February. Moreover, annual export growth significantly slowed, falling to 3.9% from 11.4%, while 12-month imports rose to 2% from a negative figure in February. The reduced export growth and increased imports point to potential trade-related challenges.
In the United States, economic indicators presented a mixed picture for March. Initial unemployment claims fell to 215,000 from 223,000, indicating a favorable labor market condition. Building permits saw an increase, rising to 1.482 million from a revised 1.459 million in February, implying potential future growth in the construction sector. Conversely, housing starts fell to 1.324 million from 1.501 million, reflecting a contraction in current housing market activities. The Manufacturing Business Outlook Survey revealed a significant decline, diving from 12.5 points to a negative 26.4 points, suggesting considerable weaknesses in the manufacturing sector. Meanwhile, Monthly Retail Trade including Automobile rose to 1.4% from 0.2%, while excluding Automobile, it decreased to 0.5% from a revised 0.7%. The Retail Trade Control Group also dropped to 0.4% from a revised figure of 1.3%, painting a complex picture of consumer spending patterns.
The contrasting economic data from Japan and the U.S. has a direct impact on the USDJPY currency pair. The slight decline in Japan’s overall CPI along with a worsening trade balance creates downward pressure on the yen. On the other hand, the mixed U.S. data, with improved unemployment and building permits but weaker manufacturing and retail figures, can cause uncertainty for the dollar. Overall, the USDJPY rose 0.5% to 142.43 and is currently in consolidation. With no major events lined up, market participants may continue to monitor economic data and global sentiment for further direction in the currency’s movement.
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What can we expect from USDJPY today?
USDJPY on Thursday rose 0.5% to 142.43. Price is below 9-Day EMA while Stochastic is rising in oversold zone.
Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 141.66 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 143.09 or trades above daily pivot 142.38. While to the downside, the daily low of 141.61 and 141.66 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A break above 143.09 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 | 144.62 |
| R2 | 143.85 |
| R1 | 143.14 |
| Daily Pivot | 142.38 |
| S1 | 141.66 |
| S2 | 140.9 |
| S3 | 140.19 |