Usdjpy rises as US housing market shows signs of cooling

USDJPY Analysis

Performance after Wednesday
Period	Pct	Chg	Momentum
Wednesday	0.25%	36.6 Pips
Week to-date	-0.71%	-104.2 Pips
June	0.69%	99.1 Pips

Upcoming key events (London Time)

Thu 01:30 PM USD GDP annual rate
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 the United States, new-home sales for May 2025 saw a notable decrease of 13.7%, in stark contrast to the previous month’s increase of 10.9%. This downturn signals potential challenges in the housing sector, possibly indicating decreased consumer confidence or rising interest rates impacting buyer affordability. Furthermore, the U.S. House Price Index in April 2025 also reported a decline, reaching -0.4%, down from -0.1% in March, according to the Federal Housing Finance Agency (FHFA). The consecutive decreases in house price indices highlight a cooling housing market, suggesting that the property sector might face continued headwinds.

Concerning the USDJPY currency pair, it rose by 0.25% to 145.17, indicating a phase of consolidation. This movement can be linked to both domestic and international factors impacting the currency dynamics. With the U.S. new-home sales and House Price Index negatively influencing market sentiment, the slight increase in USDJPY might also reflect the dollar’s resilience or yen’s vulnerability rather than fundamental strength. The upcoming economic events, including the U.S. GDP annual rate release and Japan’s Tokyo CPI, are crucial. They could provide additional momentum or volatility in the USDJPY pair depending on the data outcomes. Suppose the U.S. GDP growth surpasses expectations or the PCE Price Index shows inflationary pressures persisting. In that case, it may lead to a stronger dollar, influencing the USDJPY further upwards. Conversely, an unexpected rise in Tokyo CPI may strengthen the yen, potentially leading to a correction in the pair’s consolidation. The intertwined economic indicators dictate market sentiment and suggest that traders have ways to balance prior motions and anticipate future changes.

Latest from X (Twitter)

Tweets by Bank_of_Japan_e

What can we expect from USDJPY today?

USDJPY on Wednesday rose 0.25% to 145.17. 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 144.53 (S1).

Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 145.95 or trades above daily pivot 145.24. While to the downside, the daily low of 144.60 and 144.53 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A break above 145.95 would suggest bullish bias after recent positive movement.

For the week to-date, take note that USDJPY is mixed as compared to prior week.

Key levels to watch out: