USD/JPY Price Analysis – March 03, 2023

Daily Price Outlook

The USD/JPY pair is currently trading at $136.66. Raphael Bostic, the president of the Atlanta Federal Reserve, made some cautious comments that appear to have briefly halted the pair's upward momentum.

Jobless Claims Report and Bostic's Comments Affect US Economy and USD/JPY

On Thursday, the jobless claims report indicated a further decline in the number of Americans filing new unemployment claims, reaching 190K instead of the expected 196K. This suggests a continuing improvement in the labor market and may reduce the likelihood of the Fed raising interest rates.

Earlier in the day, the US Dollar was gaining strength. Still, it changed direction in the afternoon when Atlanta Federal Bank President Raphael Bostic said the tightening cycle could end mid-to late-summer. Bostic prefers a rate increase of 25 basis points in March, but he left the possibility of a more hawkish rate outlook if inflation and labor market statistics improve.

As a result, the US Dollar Index (DXY) is now under pressure and trading at 104.89. Later today, the US Institute of Supply Management (ISM) will release the Services PMI (Feb) data, which could significantly impact the US Dollar's movement.

Tokyo Inflation Decreases in February: First Drop in Over a Year

The inflation rate in Tokyo has dropped for the first time in over a year, but this masks a stronger pricing trend that will likely influence the policy decisions of Bank of Japan Governor Nominee Kazuo Ueda. Despite the decrease in February's annual inflation rate from 4.4% to 3.4%, and the core inflation rate from 4.3% to 3.3%, it is unlikely to pressure the Bank of Japan to reconsider its policy outlook.

The recent drop in Tokyo's inflation rate, a leading indicator for the country, suggests that the peak of price growth may have passed in January. However, the new Bank of Japan (BoJ) board supports the current monetary policy. While Kazuo Ueda, the new BoJ Governor nominee, may consider phasing out Yield Curve Control, it could lead to increased optimism for the Japanese Yen.

USD/JPY Intraday Technical Levels

Support      Resistance

136.15         137.25

135.53         137.73

135.05         138.34

Pivot Points:136.63

USD/JPY  – Technical Outlook

Due to stochastic negativity, the USD/JPY pair experienced a temporary decline after reaching the 137.00 level. However, positive signals emerge, indicating a potential resumption of the bullish trend within the upward channel shown on the chart. The EMA50 currently supports the projected bullish wave, which is dependent on the price of above 135.40.

A break below this level could end the positive scenario and push the price down to test the 133.30 regions. The trading range for today is expected to be between 135.60 support and 137.30 resistance.