Bullish Reversal Underway in USD/JPY As Japan PPI Falls
Last week we highlighted the doji candlestick on the weekly chart in USD/JPY which signaled a bullish reversal, and now the reversal is underway, with the price more than 2 cents higher already, after starting the week below 150.
After a significant rally of over 17 cents in October and November, USD/JPY faced a notable reversal. The pair dropped 7 cents during the final week of November as market sentiment shifted, pushing it below the critical 150 level. This decline marked the end of its strong upward momentum. However, signs of stabilization have since emerged, with USD/JPY recovering slightly and holding near 150. A doji candlestick on the weekly chart indicates a possible bullish reversal, which traders are closely monitoring for confirmation in the current week.
Japan’s Revised Q3 Economic Data
Japan’s Q3 GDP data offered a nuanced view of the economy. The final GDP growth figure was revised upward to 0.3% quarter-on-quarter, aligning with expectations and improving slightly from the initial 0.2% reading. However, private consumption, a key driver of growth, was revised lower to 0.7% from 0.9%, reflecting a mild slowdown in consumer spending.
The GDP price index also came in softer at 2.4%, down from the preliminary estimate of 2.5% and the previous quarter’s 2.6%, indicating that inflationary pressures are moderating. Business investment showed slight improvement, with capital expenditure revised to -0.1% from -0.2%, though firms remain cautious about expanding investments. Domestic demand, which has been a positive contributor to growth, was revised down to 0.5% from 0.6%, suggesting some weakening momentum.
Bullish Outlook for USD/JPY
The stabilization of USD/JPY around the 150 level, coupled with technical indicators like the doji candlestick, hints at a potential bullish reversal. However, Japan’s economic data reveals persistent challenges, including softer private consumption and declining domestic demand. These mixed signals highlight the uncertainties in the economic recovery and underline the need for further clarity in both market sentiment and economic performance.
Japan November PPI Producer Inflation Report
USD/JPY Live Chart
ABOUT THE AUTHOR
See More
Sidebar rates
Add 3442
Related Posts
SaveAdd 3440
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals