USDJPY Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | -0.46% | -67.1 Pips |  |
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| Week to-date | 1.04% | 148.5 Pips |  |
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| May | 0.76% | 108.5 Pips | |
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Upcoming key events (London Time)
Fri 12:30 AM JPY Tokyo CPI (Inflation Rate) (12-mth)
Fri 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)
What happened lately
In Japan, retail trade data for April 2025 indicates an improvement, with a year-on-year increase of 3.3% from the previous 3.1% in March. The seasonally adjusted monthly data also showed a positive turnaround with a 0.5% increase following a significant decline of 1.2% in March. This suggests a renewed consumer confidence and spending resilience in the Japanese market. The nation’s unemployment rate remained steady at 2.5%, indicating a stable job market. However, Japan experienced a slight decrease in inflation rates as evidenced by the Tokyo CPI, which dropped to 3.4% from 3.5%. Meanwhile, the Tokyo CPI excluding fresh food saw a moderate rise from 3.4% to 3.6%, hinting at inflationary pressures in other sectors despite the overall drop in the inflation index.
The U.S. presented a less robust economic outlook with a notable decline in pending home sales for April 2025, plummeting to -6.3% from a previously revised 6.1% in March. Initial unemployment insurance claims rose to 240K, reflecting potential strains in the labor market. The U.S. GDP for Q1 2025 showed a slight improvement, contracted at a rate of -0.2% compared to -0.3% in the previous quarter. The PCE excluding food and energy prices decreased to 3.4% from 3.5%, while the quarterly GDP Price Index remained steady at 3.7%. The PCE Price for Q1 2025 was unchanged at 3.6%, suggesting stable core inflation levels amidst economic challenges.
The recent economic data released from both Japan and the U.S. provides a mixed influence for USDJPY trading. Japan’s improved retail trade data and steady unemployment rate, alongside its rising core inflation could strengthen the yen. However, the overall inflation decrease may signal limited upward pressure on interest rates. Conversely, the U.S. data depicts slowing economic momentum with a significant downturn in real estate and rising unemployment claims, which may weigh on the U.S. dollar. The slight GDP improvement and steady core PCE suggest constrained economic pressures. All things considered, the USDJPY exchange rate is likely to remain in a consolidation phase, reflecting the balance of mixed economic signals from both nations, as seen in the slight drop of USDJPY to 144.12. Upcoming key economic data releases could further drive market movements.
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What can we expect from USDJPY today?
USDJPY on Thursday dropped -0.46% to 144.12. 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 143.29 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 146.29 or trades above daily pivot 144.79. While to the downside, the daily low of 143.96 and 143.29 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A close below 143.96 would indicate selling pressure.
For the week to-date, take note that USDJPY is mixed as compared to prior week.
Key levels to watch out:
| R3 | 147.95 |
| R2 | 147.12 |
| R1 | 145.62 |
| Daily Pivot | 144.79 |
| S1 | 143.29 |
| S2 | 142.46 |
| S3 | 140.96 |