USDJPY Analysis
| Performance after Wednesday | |||||
| Period | Pct | Chg | Momentum | ||
| Wednesday | 0.1% | 14.7 Pips |  |
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| Week to-date | 0.21% | 32.4 Pips | |
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| October | 6.66% | 956.599 Pips | |
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Upcoming key events (London Time)
Thu 03:00 AM JPY Bank of Japan Short-Term Policy Interest Rate
Thu 12:30 PM USD PCE Price Index, excluding food and energy (12-mth) Fri 12:30 PM USD Nonfarm Payroll Employment
What happened lately
Japan’s economic indicators for September show a noticeable decline in retail activity. The monthly seasonally adjusted retail trade figures fell to -2.3% from 0.8% in August, as reported by the Ministry of Economy, Trade and Industry (METI). Similarly, large retailer sales decreased to 2% from 5%. The overall retail trade growth on a year-over-year basis also shrunk significantly to 0.5% from the previous 3.1% revised data in August. These declines signal weaker consumer spending, which could be attributed to various factors including rising prices or dampened consumer confidence despite the drop in the unemployment rate to 2.4% in September from 2.5% in August, as per the Statistics Bureau of Japan.
In the United States, economic indicators for Q3 also depicted a mix of slowing growth and resilience in certain areas. The Bureau of Economic Analysis reports a slight decrease in the GDP growth rate to 2.8% from 3.0% in Q2, alongside a reduction in the GDP Price Index to 1.8% from 2.5%. Additionally, PCE prices, excluding food and energy, have decreased to 2.2%, reflecting easing consumer costs. On the housing market front, there was a robust increase in pending home sales by 7.4% in September compared to 0.6% in August, showing strength in housing demand. However, the Job Openings and Labor Turnover Survey (JOLTS) indicates a decline in job openings to 7.443 million from a revised figure of 7.861 million, suggesting some softening in the labor market reported by the Bureau of Labor Statistics.
The recent performance of USDJPY, which rose 0.1% to 153.28, reflects a minor adjustment within a consolidation phase. The weaker-than-expected retail data from Japan can pressure the yen negatively, potentially supporting further USDJPY upside. Conversely, the U.S. economic data shows a balanced outlook with certain positive indicators like housing, potentially supporting the U.S. dollar. On the horizon, pivotal events such as the Bank of Japan’s Short-Term Policy Interest Rate decision and significant U.S. economic data releases, namely the PCE Price Index and Nonfarm Payroll Employment, could provide directional clues for USDJPY. Depending on the outcomes of these events, particularly any surprises in U.S. employment data or BOJ’s policy stance, USDJPY may experience increased volatility.
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What can we expect from USDJPY today?
USDJPY on Wednesday rose 0.1% to 153.28. Price is above 9-Day EMA while Stochastic is rising.
Updated daily direction for USDJPY looks mixed as the pair is likely to consolidate above 152.87 (S1).
Looking ahead today, to see upside interest, we prefer to look at price breakout of last daily high of 153.50 or trades above daily pivot 153.18. While to the downside, the daily low of 152.78 and 152.87 (S1) as immediate support levels. USDJPY need to break on either side to indicate a short-term bias. A break above 153.50 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 | 154.31 |
| R2 | 153.9 |
| R1 | 153.59 |
| Daily Pivot | 153.18 |
| S1 | 152.87 |
| S2 | 152.46 |
| S3 | 152.15 |