USDJPY Analysis
| Performance after Monday | |||||
| Period | Pct | Chg | Momentum | ||
| Monday | -0.42% | -60.5 Pips |  |
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| Week to-date | -0.52% | -75.7 Pips |  |
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| June | -0.11% | -15.2 Pips | |
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Upcoming key events (London Time)
Tue 12:50 AM JPY Tankan Large Manufacturing Index Tue 02:30 PM JPY Bank of Japan Governor Kazuo Ueda speech
Tue 02:30 PM USD Federal Reserve Chair Jerome Powell speech
What happened lately
In the second quarter of 2025, Japan witnessed a notable increase in economic activity, as indicated by the Tankan Large All Industry Capex. The capital expenditure rose sharply to 11.5% from a relatively moderate 3.1% in the previous quarter. This surge suggests enhanced business confidence and potential future economic expansion as companies are willing to invest more heavily in boosting their capacity and production capabilities. Concurrently, the Tankan Large Manufacturing Index saw a modest increase, rising to 13 points from 12 in the first quarter, reflecting slight improvement within the manufacturing sector. However, the outlook for the sector remained unchanged at 12 points, indicating a stable but cautious approach from businesses towards future economic conditions.
The recent depreciation of the USDJPY to 144.01, marking a -0.42% drop on Monday and a slight -0.11% decline by the end of June, can be attributed to the strengthening position of the Japanese economy. The improved economic indicators suggest a more favorable environment for the yen. This economic strength can exert upward pressure on the yen relative to the U.S. dollar, especially as the markets may now anticipate possible adjustments or policy responses from the Bank of Japan to manage the currency effectively. Upcoming high-impact events, such as the Tankan Large Manufacturing Index release and speeches from both the Bank of Japan Governor Kazuo Ueda and Federal Reserve Chair Jerome Powell, are likely to further influence the USDJPY dynamics. Market participants will closely watch these events for any signals or comments that could shift monetary policy expectations in both Japan and the United States. Such changes might further impact the yen-dollar exchange rate, and any hints of policy tightening or continued economic strength in Japan could strengthen the yen against the dollar.
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What can we expect from USDJPY today?
USDJPY on Monday dropped -0.42% to 144.01. Price is below 9-Day EMA while Stochastic is falling in oversold zone.
Updated daily direction for USDJPY looks bearish as the pair posted lower in Monday trading session.
Looking ahead for the day, immediate support level is at 143.6 (S1) with break below could see further selling pressure towards 143.2 (S2). To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 144.76 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 143.78 would indicate selling pressure.
For the week to-date, take note that USDJPY is mixed as compared to prior week.
USDJPY ended month of June trading session down by -0.11% or -15.2 pips lower.
Key levels to watch out:
| R3 | 145.57 |
| R2 | 145.17 |
| R1 | 144.59 |
| Daily Pivot | 144.18 |
| S1 | 143.6 |
| S2 | 143.2 |
| S3 | 142.62 |