USDJPY Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | 2.02% | 290.8 Pips |  |
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| Week to-date | 2.7% | 385.299 Pips | |
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| October | 2.04% | 292.599 Pips |  |
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Upcoming key events (London Time)
Fri 01:30 PM USD Nonfarm Payroll Employment
What happened lately
In the United States, the Job Openings and Labor Turnover Survey (JOLTS) for August reported an increase in job openings, rising to 8.04 million from a revised figure of 7.711 million in July, according to the Bureau of Labor Statistics. This indicates a strengthening labor market, with more job opportunities available for workers. A higher number of job openings typically suggests that employers are seeking to hire more workers, which can be an indicator of economic growth and can lead to upward pressure on wages.
In Japan, the economic data paints a mixed picture. The Tankan Large Manufacturing Index for Q3 remained unchanged at 13 points from the previous quarter, as reported by the Bank of Japan. Similarly, the Tankan Large Manufacturing Outlook also held steady at 14 points. While these steady figures suggest stability in manufacturing sentiment, the Tankan Large All Industry Capital Expenditure (Capex) index dropped to 10.6% from 11.1% in Q2, indicating a reduction in investment plans across industries. In contrast, Japan’s unemployment rate showed a positive change, decreasing to 2.5% in August from 2.7% in July, as per the Statistics Bureau of Japan. This decline in unemployment may reflect positive developments in the labor market, providing a slight boost to consumer confidence.
The increase in USDJPY to 146.64 with a rise of 2.02% suggests a strengthening U.S. dollar against the Japanese yen. Economic data from the U.S. reflecting more job openings can lead to anticipation of potential wage growth and inflationary pressures, which may prompt expectations of tighter monetary policy by the Federal Reserve. On the other hand, Japan’s unchanged manufacturing outlook and dip in business capex, coupled with a lower unemployment rate, provide a mixed signal for its economic momentum. The contrasting economic indicators may contribute to a stronger USD relative to the JPY. Additionally, market participants will likely be attentive to upcoming U.S. economic reports, such as the Nonfarm Payroll Employment data, which could further influence the USDJPY exchange rate.
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What can we expect from USDJPY today?
USDJPY on Wednesday rose 2.02% to 146.64. Price is above 9-Day EMA while Stochastic is rising.
Updated daily direction for USDJPY looks bullish as the pair ended higher after Wednesday trading session.
Looking ahead for the day, immediate upside resistance level is R1 at 147.86 with break above could target R2 at 149.08. While towards the downside, we are looking at daily low of 143.52 as an important support. Break below this level could weaken the current bullish momentum. A break above 146.92 would suggest bullish bias after recent positive movement.
For the week to-date, take note that USDJPY is bullish as the pair continued to trade higher and is up by 2.7% over the past few days.
Key levels to watch out:
| R3 | 151.25 |
| R2 | 149.08 |
| R1 | 147.86 |
| Daily Pivot | 145.69 |
| S1 | 144.47 |
| S2 | 142.3 |
| S3 | 141.08 |