USDJPY Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | -0.23% | -32.9 Pips |  |
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| Week to-date | -0.37% | -53.4 Pips | |
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| June | 0.16% | 23.3 Pips |  |
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Upcoming key events (London Time)
Thu 01:30 PM USD PPI excluding Food and Energy sectors (12-mth) Fri 03:00 PM USD Index of Consumer Sentiment
What happened lately
In the United States, May 2025 saw a significant decline in the Monthly Treasury Budget Statement, plummeting to -$316 billion from $258 billion in April. This indicates a larger budget deficit which could signal increased government borrowing needs, potentially affecting investor confidence in U.S. fiscal health. On the inflation front, the U.S. Consumer Price Index (CPI) inflation rate rose marginally to 2.4% in May from 2.3% in April. However, when excluding the volatile food and energy sectors, the inflation rate remained steady at 2.8%. Meanwhile, the month-over-month CPI inflation excluding food and energy sectors decreased slightly to 0.1% from 0.2%, and the general CPI also saw a monthly decrease to 0.1% from 0.2% in April. These figures suggest underlying inflationary pressures remain subdued, which might influence the Federal Reserve’s monetary policy considerations concerning interest rate adjustments.
The USDJPY exchange rate experienced a slight decline of 0.23% to 144.53. This is indicative of some consolidation in the forex market as investors digest the mixed U.S. economic data. The larger budget deficit alongside slightly rising inflation could lead to expectations of increased U.S. borrowing and moderate inflationary pressure. This scenario might not support a stronger dollar, leading to a weaker USD in the short term against the yen given the safe-haven appeal of the Japanese currency. Furthermore, upcoming high-impact economic events, such as the USD PPI excluding food and energy sectors, and the USD Index of Consumer Sentiment, may further influence USDJPY movement depending on how the U.S. economic outlook pans out post these announcements. Investors may remain cautious, awaiting these data releases to reassess the economic trajectory and potential Federal Reserve responses, all of which may either dampen or uplift the USDJPY exchange rate accordingly.
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What can we expect from USDJPY today?
USDJPY on Wednesday dropped -0.23% to 144.53. Price is above 9-Day EMA while Stochastic is falling.
Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 144.08 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 145.47 or trades above daily pivot 144.77. While to the downside, the daily low of 144.32 and 144.08 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A close below 144.32 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 | 146.37 |
| R2 | 145.92 |
| R1 | 145.22 |
| Daily Pivot | 144.77 |
| S1 | 144.08 |
| S2 | 143.63 |
| S3 | 142.93 |