USDJPY Heads for 155 Despite the Improving Japan PMI
USDJPY has resumed the uptrend again after the decisive bullish move last week, helped by rising US yields, as the pair bounced off the 20 weekly SMA.
After a strong two-month rally where the USD/JPY gained over 17 cents, the pair experienced a sharp decline in the final week of November. This selloff intensified during the US Thanksgiving week, driving the pair down by 7 cents and below the critical 150 level. However, support from the weekly chart’s 20 SMA (gray) halted the decline.
In the first week of December, the pair consolidated around the 150 mark, forming a doji candlestick on the weekly chart—often a signal of a potential bullish reversal. This reversal materialized last week as the USD/JPY regained upward momentum, climbing by 3 cents, driven by rising US yields that bolstered the dollar.
USD/JPY Chart Weekly – Perfect Bullish Reversing Pattern
Japan’s economy continues to grow at a sluggish pace, with persistent weaknesses in private investment and consumer spending. The Bank of Japan’s decision to maintain low interest rates, aimed at supporting economic activity, further pressures the yen against stronger currencies like the US dollar. This combination of factors keeps the USD/JPY firmly in a bullish trajectory.
Japan Flash Manufacturing and Services PMI for December
Private sector activity showed modest growth, the fastest since September, with the services sector leading the way. However, industrial output experienced a decline for the fourth consecutive month. In terms of demand, the services sector saw its strongest increase in new business in four months, while manufacturing orders took a significant hit. Inflation pressures intensified, with input prices rising at their fastest pace in four months, primarily driven by a weak yen and higher import costs.
Selling price inflation also increased, reaching its highest level since May. Business confidence remained above the norm but dropped to its second-lowest level in nearly three years. Concerns about labor shortages and the impact of high inflation on business activity dominated the outlook.
USD/JPY Live Chart
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