USDJPY Analysis

Upcoming key events (GMT+8)

No major events for the day.

What happened lately

The USDJPY pair experienced a modest increase of 0.14% on Thursday, closing at 159.71000, with the day’s trading range spanning from a low of 159.28000 to a high of 159.84000. This upward movement in the currency pair occurred in the absence of major economic releases or scheduled events that could have directly influenced the market dynamics during this period.

Recent economic indicators from Japan, however, provide some context to the broader economic environment. Japan’s Merchandise Trade Balance Total for March showed a significant increase to 667¥ from 57.3¥ in February, indicating a strengthening trade position. Additionally, Japan’s 12-month import growth rose to 10.9%, while export growth increased to 11.7%, suggesting robust trade activity. The Adjusted Merchandise Trade Balance also improved markedly to 90.7¥ from a revised -367.8¥ in February.

Inflation metrics from Japan revealed a slight uptick, with the National CPI Inflation Rate rising to 1.5% in March from 1.3% in February. The CPI excluding Fresh Food increased to 1.8%, while the CPI excluding Food and Energy saw a minor decrease to 2.4% from 2.5% in February. These figures suggest a mixed inflationary environment, potentially influencing market perceptions of economic stability and monetary policy outlook.

In the United States, Initial Unemployment Insurance Claims for the week ending 18 April rose to 214K from 207K, indicating a slight increase in jobless claims, which could have implications for the U.S. labor market’s health and economic sentiment.

Overall, the market sentiment appears to be cautiously optimistic, with the USDJPY’s upward movement reflecting a combination of Japan’s improving trade balance and mixed inflation data, alongside the U.S. labor market’s slight weakening. However, without major upcoming events or releases, the market may continue to react to broader economic trends and data as they emerge.

What can we expect from USDJPY today?

Today, USDJPY is showing a bullish daily outlook, with a slight increase of 0.14% to close at 159.71000. The pair’s price remains above the 9-day EMA, suggesting continued upward momentum.

If the bullish sentiment persists, USDJPY could test resistance levels at R1: 159.94 and potentially R2: 160.17. A sustained move above the daily pivot of 159.61 would reinforce the bullish scenario, especially if the pair manages to break through the daily high of 159.84000.

Conversely, a bearish scenario may unfold if USDJPY fails to maintain its position above the daily pivot. A decline towards the support levels at S1: 159.38 and further to S2: 159.05 could be triggered by a continued fall in the stochastic indicator, which is currently in the overbought zone. Monitoring these support levels will be crucial for traders considering potential downside risks.

Key levels to watch out: