USDJPY on Friday rose 0.88% to 143.81. Week ending 2024-09-20 rose 2.14%. What’s going on.

USDJPY Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.88%	125.2 Pips
Week 242024-09-20	2.14%	301.801 Pips	September	-0.75%	-108.2 Pips

Upcoming key events for the new week (London Time)

Thu 01:30 PM Initial Unemployment Insurance Claims
Thu 01:30 PM GDP annual rate
Thu 02:20 PM Federal Reserve Chair Jerome Powell speech
Fri 12:30 AM Tokyo CPI (Inflation Rate) (12-mth)
Fri 01:30 PM PCE Price Index, excluding food and energy (12-mth)

What happened over the week

In Japan, various economic indicators have shown notable activity. The Bank of Japan maintained its Short-Term Policy Interest Rate unchanged at 0.15%. Concurrently, inflation indicators reported by the Statistics Bureau of Japan reveal a trend of rising prices. The National CPI Inflation Rate for August excluding food and energy climbed to 2%, slightly up from 1.9% in July. The CPI Inflation Rate excluding fresh food also saw a modest increase to 2.8%, compared to 2.7% in the previous month. The overall National CPI Inflation Rate escalated to 3% in August, up from 2.8% in July. However, Japan’s export growth rate dropped significantly to 5.6% in August from a revised 10.2% in July, and import growth decreased sharply to 2.3% from 16.6%. The Merchandise Trade Balance also deteriorated, widening the deficit to -695.3¥ from a revised -628.7¥ in July.

In the United States, economic indicators pointed towards mixed yet generally positive movements. The Manufacturing Business Outlook Survey by the Philadelphia Fed improved significantly in September, rising to 1.7 points from -7 points in August. Initial Unemployment Insurance Claims for the week ending September 14 decreased to 219K, down from a revised figure of 231K. Housing metrics from the Census Bureau reported growth, with Building Permits increasing to 1.475 million in August and Housing Starts rising to 1.356 million. However, the Federal Reserve’s actions have been notable, with the Federal Funds Rate dropping to 5% from 5.5%, and interest rate projections lowered to 4.4% from 5.1%.

The recent economic data from both countries has contributed to fluctuations in the USDJPY currency pair. The positive economic signals from the U.S., such as improved manufacturing outlook and lower unemployment claims, as well as the Federal Reserve’s interest rate cuts, have coordinated to strengthen the U.S. dollar. Meanwhile, Japan’s relatively static interest rates alongside increased inflation and declining trade metrics may have diminished the yen’s appeal. Consequently, USDJPY rose by 0.88% to 143.81000 on Friday and increased by 2.14% over the week ending September 20. This underscores a stronger dollar and a potentially weaker yen owing to diverging monetary policies and economic conditions.

From social media

The BOJ released the Statement on Monetary Policy after the September 19 and 20 Monetary Policy Meeting.https://t.co/bmgORqQWF0 pic.twitter.com/TVrd1slPRT

— Bank of Japan (@Bank_of_Japan_e) September 20, 2024

What can we expect from USDJPY for the new week and what happened on Friday?

USDJPY on Friday rose 0.88% to 143.81. Price is above 9-Day EMA while Stochastic is rising. For the week ending ,2024-09-20, the pair rose 2.14% or 301.801 pips higher.

Looking ahead, USDJPY looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook looks bullish, immediate upside resistance level at 145.43 (WR1) with break above could target 147.05 (WR2). On the downside, we are looking at week low of 140.32 as an important support. Break below this level could weaken the current bullish momentum. A break above 144.50 would suggest bullish bias after recent positive movement.

For the month of September, USDJPY is down by -0.75% or -108.2 pips lower.

Weekly key levels to watch out:

You might also be interested in:

Statement on Monetary Policy Source: Bank of Japan
U.S. International Transactions, 2nd Quarter 2024 Source: Bureau of Economic Analysis
Speech by Board Member TAMURA in Okayama on Sept. 12, 2024 (Economic Activity, Prices, and Monetary Policy in Japan) Source: Bank of Japan
Federal Reserve Board and Federal Open Market Committee release economic projections from the September 17-18 FOMC meeting Source: Federal Reserve
Federal Reserve issues FOMC statement Source: Federal Reserve
New Residential Construction Source: Census Bureau
Manufacturing and Trade Inventories and Sales Source: Census Bureau
Speech by Board Member NAKAGAWA in Akita on Sept.11, 2024 (Economic Activity, Prices, and Monetary Policy in Japan) Source: Bank of Japan
Trade Statistics (August 2024 [Provisional]) Source: Ministry of Finance
Advance Monthly Sales for Retail and Food Services Source: Census Bureau