- Summary:
- Once more, the US has printed out lower-than-expected macroeconomic figures, and this has boosted the yen's strength after Japan's CPI.
The USDJPY trading pair has gone below the 150.00 mark for the first time in seven days, helped by lower-than-expected US macroeconomic data. The currency pair trades at 149.80, down by -0.60%, minutes after the release of US Initial Jobs Claims and Personal Consumption Expenditure (PCE) data. Also, it is the largest drop on the daily chart for the dollar against the yen since January 21st, 2023.
The Initial Jobless Claims rose to 215,000, exceeding the forecast 209,000 and the previous figure of 202,000. However, Core PCE Price Index for January matched the forecast figures of 2.8% and 0.4% for the year-on-year and month-on-month readings respectively. On the other hand, Japan released a forecast-beating Core CPI (Year-on-Year), which read 2.6%. The forecast figure was lower, at -2.3%.
The back-to back disappointing economic data from the US have put the dollar under pressure, and could see it extend its losses against the yen into Friday. Furthermore, yields on the ten-year and five-year US Treasuries have fallen back below 4.300% as of this writing. This could compound the dollar’s troubles ahead of Friday’s release of US PMI figures by the Supply Management Institute.
No impactful macroeconomic data will come out of Japan on Friday. This puts the dollar in a delicate position where lower-than-expected PMI readings could exacerbate the losses and higher-than-expected figures could see it make a substantial recovery. The market will, however, get useful hints from the February Chicago PMI release, which fell below expectations, coming in at 44.0, vs the projected 48.0 on Thursday. Elsewhere, three FOMC members are scheduled to speak later on Thursday and the Fed’s balance sheet figures will follow hours later. These, too, could create sentiment to shape the USDJPY trajectory.
Technical analysis
USDJPY pivots at 149.74. The RSI momentum indicator signals bearish control, which means that the bears will attempt to bring the prices to the 149.55 support mark. Extended control by the sellers at that level could bring the pair to test 149.32. However, upside gains could be possible if the buyers take control above 149.74. This could help them build momentum to push past the next resistance at 149.84 mark, from which they will target 150.12
