USDJPY Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | 0.36% | 53.2 Pips |  |
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| Week to-date | 0.18% | 27.2 Pips |  |
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| October | 4.1% | 589.599 Pips | |
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Upcoming key events (London Time)
Thu 01:30 PM USD Monthly Retail Trade (1-mth)
What happened lately
In Japan, the Ministry of Finance reports that import growth has slowed from 2.3% in August to 2.1% in September, showing a slight decrease in activity. More notably, exports have plummeted, moving from a positive 5.5% in August to -1.7% in September. Despite this decline in both imports and exports, Japan’s merchandise trade balance improved significantly, reducing the deficit from -695.3 billion yen in August to -294.3 billion yen in September. This development indicates some stabilization in trade, although it could reflect challenges in both internal and external economic conditions impacting trade flows.
In the United States, data from the New York Federal Reserve indicates a concerning downturn in manufacturing activity. The New York Empire State Manufacturing Index dropped dramatically from 11.5 points in September to -11.9 points in October. This shift into negative territory suggests that the manufacturing sector is contracting, potentially a sign of broader economic headwinds. These figures may impact investor sentiment and economic outlook in short-term financial markets, influencing policy expectations and currency movements.
The recent depreciation of USDJPY to 149.61, representing a 0.36% increase, can be attributed to several factors. Japan’s trade data reveals lingering issues with their external sectors, notably the export decline, which suggests weaker overseas demand. Meanwhile, the U.S. manufacturing data signals negative momentum in that sector, which could contribute to a context where the dollar gains strength as a safe-haven asset amidst uncertain economic conditions. However, as markets prepare for upcoming U.S. retail trade data, the pair’s movement might hinge on these future indicators. High-impact data releases often incite volatility, and with potential further insights into U.S. economic conditions, traders will be attentive to how these figures might drive USD strength or weakness, directly influencing the USDJPY exchange trajectory.
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What can we expect from USDJPY today?
USDJPY on Wednesday rose 0.36% to 149.61. Price is above 9-Day EMA while Stochastic is falling.
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 149.99 with break above could target R2 at 150.37. While towards the downside, we are looking at daily low of 148.86 as an important support. Break below this level could weaken the current bullish momentum. A break above 149.81 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:
| R3 | 150.94 |
| R2 | 150.37 |
| R1 | 149.99 |
| Daily Pivot | 149.42 |
| S1 | 149.04 |
| S2 | 148.48 |
| S3 | 148.09 |