USDJPY Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | -0.57% | -82.6 Pips |  |
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| Week to-date | -1.12% | -163.3 Pips | |
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| May | 0.7% | 99.8 Pips |  |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In Japan, the Adjusted Merchandise Trade Balance presented a decline, moving to -408.91¥ in April 2025 from a revised figure of -291.74¥ in March. This indicates a deteriorating trade balance for the nation. The Merchandise Trade Balance Total also witnessed a significant drop from 544.1¥ in March to -115.8¥ in April 2025, signaling larger issues in Japan’s trade dynamics. Further, the 12-month imports saw a decline, decreasing to -2.2% in April 2025 from 2% in March, illustrating a contraction in imports activity over the year. Importantly, Japan’s 12-month export growth rate decreased notably from 3.9% in March to 2% in April 2025, revealing slowing export growth. Collectively, these data points highlight challenges in Japan’s trade sector, with falling exports and imports contributing to a worsening trade balance.
The recent developments in Japan’s trade data might be influential on the USDJPY exchange rate. With Japan’s merchandise trade balance deteriorating sharply and the export growth rate declining, there will likely be increased pressure on the Japanese Yen. Typically, a weaker trade performance could lead to a depreciation of the Yen due to the lower demand for the currency when exports drop. However, the value of USDJPY recently dropped by -0.57% to 143.65, despite these indicators. This divergence might be due to other macroeconomic factors or market sentiments that are currently not detailed, such as perceptions of monetary policy or risk appetites. Over time, sustained poor trade data from Japan could lead to a weaker Yen if no other counteracting factors influence market behaviors. Conversely, should the U.S. dollar remain stable, these circumstances could result in a long-term upward pressure on the USDJPY pairing.
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What can we expect from USDJPY today?
USDJPY on Wednesday dropped -0.57% to 143.65. Price is below 9-Day EMA while Stochastic is rising in oversold zone.
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 143.12 (S1) with break below could see further selling pressure towards 142.59 (S2). To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 144.49 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 143.28 would indicate selling pressure.
For the week to-date, take note that USDJPY is bearish as the pair posted lower by -1.12%.
Key levels to watch out:
| R3 | 145.54 |
| R2 | 145.02 |
| R1 | 144.33 |
| Daily Pivot | 143.81 |
| S1 | 143.12 |
| S2 | 142.59 |
| S3 | 141.91 |