Usd/jpy drops 0.56% to 146.63 amidst mixed inflation data from the u.s.

USDJPY Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	-0.56%	-82.3 Pips
Week to-date	0.79%	114.9 Pips
May	2.46%	352.2 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD PPI excluding Food and Energy sectors (12-mth)
Thu 01:30 PM USD Monthly Retail Trade (1-mth)
Thu 01:40 PM USD Federal Reserve Chair Jerome Powell speech
Fri 12:50 AM JPY GDP (3-mth)

What happened lately

In the United States, the Consumer Price Index (CPI) Inflation Rate for April 2025 showed a marginal decrease to 2.3% from 2.4% in March 2025 over a 12-month period as reported by the Bureau of Labor Statistics. This indicates a slight easing in inflation pressure on a year-over-year basis. However, the monthly rate saw an increase to 0.2% from a negative -0.1% in March, suggesting a short-term uptick in inflationary pressures. When food and energy sectors are excluded, the core CPI inflation rate also increased slightly to 0.2% in April from 0.1% in the previous month, yet the year-on-year core inflation remained steady at 2.8%. These figures illustrate a mixed inflation scenario where long-term pressures appear to be easing slightly, while short-term changes show an upward movement, highlighting some volatility in the underlying price trends.

The USDJPY currency pair recently experienced a decrease by 0.56% to a level of 146.63. This movement can be partly attributed to the nuanced inflation data from the U.S. which might signal less aggressive tightening from the Federal Reserve due to a slight reduction in year-on-year inflation, balancing out the modest rise in monthly rates. This development could potentially lower yield expectations, reducing the appeal of the USD against the Japanese Yen. Upcoming events, such as the release of U.S. PPI excluding food and energy sectors, retail trade data, and a speech by Federal Reserve Chair Jerome Powell, hold high significance as they could impact expectations and sentiment in the market further. Traders will also keep an eye on Japan’s GDP announcement, which could add another layer of influence on the currency pair’s movement. Overall, the mixed inflation data, coupled with high-impact upcoming economic events and speeches, could induce further volatility in USDJPY in the near term.

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What can we expect from USDJPY today?

USDJPY on Wednesday dropped -0.56% to 146.63. Price is above 9-Day EMA while Stochastic is falling.

Updated daily direction for USDJPY looks bearish as the pair posted lower in Wednesday trading session.

Looking ahead for the day, immediate support level is at 145.6 (S1) with break below could see further selling pressure towards 144.56 (S2). To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 147.67 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 145.60 would indicate selling pressure.

For the week to-date, take note that USDJPY is bullish as the pair continued to trade higher and is up by 0.79% over the past few days.

Key levels to watch out: