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USDJPY In Range, Investors Wait for Japan Data

USDJPY traded sideways in the New York trading session on Thursday, with US economic data failing to spur definitive market movement. The currency pair traded at 151.32 at the time of writing, remaining relatively unchanged in intra-day trading. Traders have opted to wait for Japanese data later in the day for fresh impetus.

The US GDP grew by 3.4% in the fourth quarter of 2023, exceeding the forecast 3.2%. The dollar also got support from Initial Jobs Claims figures, which declined to 210,000, performing better than the expected 212,000. Meanwhile, the previous week’s reading was revised to 212k from 210k.  Nonetheless, USDJPY buyers have opted to hold their horses and wait for the release of Japan’s figures later on Thursday.

Japan’s Minister for Finance indicated on Wednesday that the government is ready to intervene to save the yen from excessive erosion. This saw the USDJPY pair reverse from just under 152.00 mark, which many believe is the threshold that would trigger a market intervention. Thursday’s release of three key economic data could present the turning point.  

Japan’s Statistics Bureau is expected to announce the March Tokyo Core Consumer Price Index (CPI), with the inflation figure expected to come in at 2.4%. Japan has been fighting deflationary pressures amidst intense government stimulus. Therefore, the reading could have far-reaching implications for USDJPY.  The trading pair could also be impacted by the February industrial production figures, which are forecast to show a rise of 1.2%.  Furthermore, many investors will also position themselves for Friday’s US Personal Consumption Expenditure (PCE) Price Index figures.

Technical analysis

The RSI on the USDJPY momentum indicator signals control by the sellers. The momentum will likely continue if resistance remains at 151.55. The momentum could see movement to break the 151.00 support, beyond which the next support will be at 150.80.  However, a move above 151.55 will likely support the upside, with resistance at 151.90. Furthermore, if the buyers break the resistance, they could build momentum to test 152.20, thus invalidating the downside view.