USDJPY Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | -0.11% | -15.7 Pips |  |
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| Week to-date | 0.65% | 93.7 Pips |  |
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| June | 0.68% | 98.3 Pips | |
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Upcoming key events (London Time)
No major events for the day.
What happened lately
In the United States, the Federal Reserve has maintained interest rates at 4.5%, with minor changes in future projections. The second year’s interest rate projection has been revised upwards to 3.4%, while the first year saw a smaller increase than expected, rising to 3.6%. Meanwhile, unemployment claims saw a slight decrease from previous figures, signaling some resilience in the job market. However, U.S. Building Permits, Housing Starts, and Industrial Production have all decreased in May 2025, which are indicators of a potential economic slowdown. Retail activity has similarly declined, with Monthly Retail Trade figures for May falling to -0.9% and excluding automobiles to -0.3%. The Retail Trade Control Group, however, showed a promising sign with an increase to 0.4%. These mixed signals indicate uncertainties about the strength of the U.S. economy going forward.
In Japan, the Ministry of Finance reported an improvement in the Adjusted Merchandise Trade Balance for May 2025, yet the overall merchandise trade balance remains negative at -637.6 billion yen. Import activity has decreased significantly by -7.7% on a yearly basis, down from -2.2% in April, while exports also showed a decline, falling to -1.7% from a previous growth of 2%. Despite some improvement in trade balance figures, the significant decreases in exports and imports suggest challenges in external demand and domestic consumption. The Bank of Japan has kept its short-term policy interest rate unchanged at 0.5%, indicating a continued accommodative stance in monetary policy.
The recent economic data from both the U.S. and Japan suggests a cautious outlook for USDJPY. The decline in Japanese exports and imports along with negative interest rate dynamics do not necessarily present a favorable environment for a stronger yen in the short term. However, given the U.S.’s mixed signals with declining retail sales, industrial production, and housing starts, the overall scenario might point towards a weaker dollar. As per the recent session, USDJPY dropped slightly by -0.11% to 145.06, and the pair remains in a consolidation phase amid these economic updates. Without major scheduled events on the horizon, the pair might experience limited volatility unless unexpected developments occur. Overall, further trends in USDJPY will rely on how these economic factors evolve in conjunction with future interest rate decisions and global economic conditions.
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What can we expect from USDJPY today?
USDJPY on Wednesday dropped -0.11% to 145.06. Price is above 9-Day EMA while Stochastic is rising.
Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 144.44 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 145.44 or trades above daily pivot 144.94. While to the downside, the daily low of 144.32 and 144.44 (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 | 146.68 |
| R2 | 146.06 |
| R1 | 145.56 |
| Daily Pivot | 144.94 |
| S1 | 144.44 |
| S2 | 143.82 |
| S3 | 143.32 |