Usdjpy rises 0.14% in Tuesday consolidation amidst mixed economic data

USDJPY Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	0.14%	19.9 Pips
Week to-date	-0.95%	-136.1 Pips
April	-5.11%	-765.7 Pips

Upcoming key events (London Time)

Wed 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)
Wed 01:30 PM USD GDP annual rate
Thu 04:00 AM JPY Bank of Japan Short-Term Policy Interest Rate

What happened lately

In March, Japan experienced a decline in Retail Trade, with the seasonal adjustment falling to -1.2% from the previous month’s 0.5%, as reported by the Ministry of Economy, Trade and Industry (METI). However, Large Retailer Sales in Japan saw a positive uptick, increasing to 3% from February’s 2%. When examining the broader perspective, Japan’s retail trade over 12 months rose significantly to 3.1% in March, up from 1.3% in February. This indicates resilient consumer spending in the face of monthly fluctuations, suggesting a recovery trend in Japan’s retail sector.

In the U.S., the labor market is showing signs of a slowdown, as evidenced by the Job Openings and Labor Turnover Survey (JOLTS), which reported a decrease in job openings to 7.192 million in March from 7.568 million in February. This decline in job openings suggests a cooling in the labor demand, potentially hinting at a slow down in economic activities or tightening of financial conditions. Additionally, the U.S. House Price Index reflected a similar softening trend, decreasing to 0.1% in February from 0.2% in January, indicating a moderation in the housing market’s upward momentum.

In the context of USDJPY, the pair saw a slight increase of 0.14% to 142.26 on Tuesday, reflecting a period of consolidation. The mixed economic data from both Japan and the U.S. presents a complex outlook for the currency pair. The decrease in U.S. job openings could suggest potential weakness for the dollar, while the improvement in Japan’s retail sales provides some support for the yen. However, the upcoming high-impact events, particularly the U.S. PCE Price Index and GDP annual rate, alongside Japan’s Bank of Japan Short-Term Policy Interest Rate announcement, will likely weigh heavily on the pair’s movement. Traders will be keenly observing these data releases for cues on future monetary policy directions, which could either amplify or dampen the current consolidation phase of USDJPY.

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What can we expect from USDJPY today?

USDJPY on Tuesday rose 0.14% to 142.26. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 141.9 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 142.76 or trades above daily pivot 142.33. While to the downside, the daily low of 141.97 and 141.9 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A break above 142.76 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: