USD/JPY Dips to 150.150: Mixed Japanese GDP and US Inflation Data In Play

The USD/JPY pair is currently trading at 150.121, showing a slight decline of 0.03%. In the recent economic updates, Japan’s economy showed a mixed bag of results, with the preliminary GDP price index year-over-year coming in at 3.8%, slightly below the 4.0% forecast but a noticeable decrease from the previous 5.3%.

This indicates a cooling of inflationary pressures within the country. However, the preliminary GDP quarter-over-quarter contracted by 0.1%, against expectations of 0.2% growth, signalling a slight economic slowdown from the -0.7% reported in the previous period.

Meanwhile, revised industrial production month-over-month reflected a growth of 1.4%, albeit below the anticipated 1.8%, suggesting a moderate pace in industrial activity.

On the other side of the Pacific, the US reported a core CPI month-over-month increase of 0.4%, slightly higher than the expected 0.3%, while the general CPI also rose by 0.3%, indicating steady inflationary trends.

The year-over-year CPI stood at 3.1%, showcasing a gradual rise from the predicted 2.9% and a decrease from the previous 3.4%, underscoring a controlled inflation environment conducive to economic stability.

Events Ahead

Looking ahead, significant US economic indicators are set to be released, including core retail sales month-over-month expected at 0.2%, and retail sales month-over-month anticipated to rebound to 0.6% from a -0.2% dip, reflecting consumer confidence and spending patterns.

Additionally, the Empire State Manufacturing Index and the Philly Fed Manufacturing Index will provide insights into the manufacturing sector’s health, with forecasts suggesting a less negative outlook compared to previous figures.

Unemployment claims are expected to remain stable at 219K, underscoring a robust labour market.

Other crucial data points like industrial production, capacity utilization rate, business inventories, and the NAHB Housing Market Index will further delineate the US economic landscape, offering investors and policymakers a comprehensive view of the country’s fiscal health and potential directions for monetary policy adjustments.

USD/JPY Technical Outlook

The currency pair navigates through a tightly bound market, with the pivot point at 150.87, marking a crucial juncture for upcoming trading sessions. Resistance levels are observed at 150.26, stretching up to 151.44, and peaking at 150.50, while support emerges at 149.59, followed by 148.91, and further down at 148.50.

Technical analysis reveals a relative strength index (RSI) of 56, hovering near the midpoint, and a 50-day exponential moving average (EMA) at 149.171, suggesting a potential pivot for the pair’s direction.

Notably, the pair exhibits a bearish engulfing candle on the 4-hour chart, hinting at a downtrend despite an overbought condition near the 150.850 resistance level.

In conclusion, the USD/JPY demonstrates bullish potential above the 150.87 pivot, with caution advised due to recent bearish signals indicating a shift towards a selling trend.

USD/JPY Live Chart