Daily Price Outlook

The USD/JPY pair is currently trading around 136.00. Investors are closely watching Federal Reserve Chair Jerome Powell's speech for any indications about US monetary policy, causing the pair to remain within a narrow trading range.

Jerome Powell's Upcoming Speech: What to Expect and Its Potential Impact on the Markets

Investor sentiment remains positive towards the US economy despite a tight labor market, rising inflation, and strong service sector activity. However, concerns remain about the vulnerability of the industrial industry.

A recent report indicated a 1.6% decline in factory orders in January, slightly better than the expected decline of 1.8%. Excluding transportation, factory orders rose by 1.2%.

Following the recent report, the US Dollar Index dropped below 104.30, and the softer USD kept the USD/JPY pair in check. Market participants are now waiting for crucial events, including Fed Chair Jerome Powell's speech on Tuesday and the NFP data release on Friday, for more insight into monetary policy.

Jerome Powell, the head of the Federal Reserve, is scheduled to deliver a speech to Congress where he is expected to provide an update on the status of the US economy and the central bank's monetary policy plans.

Analysts predict that Powell may suggest that recent economic data may require higher interest rates than expected. Investors will be closely monitoring Powell's remarks as any hawkish indications he provides could lead to market volatility.

BoJ Policy Meeting in Focus as Markets Await Key Announcements

In Japan, there has been a concerning drop in real wages in January, with the worst decline seen in over nine years. Data revealed that all cash wages only increased by 0.8% year over year in January, which is significantly lower than the 4.1% growth seen in December.

The Bank of Japan's (BoJ) monetary policy is focused on wage growth, and Governor Kuroda has stated that he will not tighten monetary policy until there is evidence that wage growth, rather than external factors such as commodity prices, is the primary driver of inflation.

Furthermore, Governor Kuroda is set to step down after the BoJ policy meeting on March 10. Many speculate that he will use this opportunity to start policy normalization by revising the Yield Curve Control (YCC).

Despite the recent decline in the USD/JPY pair, yen buyers remain optimistic due to speculations that Kuroda will make significant moves before his departure.

USD/JPY Intraday Technical Levels

Support      Resistance

135.52         136.32

135.04         136.66

134.71         137.13

Pivot:          135.85

USD/JPY  – Technical Outlook

The USD/JPY pair remained steady around the EMA50, with no significant movements since yesterday. The bearish trend scenario remains unchanged, pending a breakout from the correctional bullish channel. The pair is expected to visit levels of 134.55 and 133.30.

The Stochastic indicator shows a loss of positive momentum, supporting the expected decline. Breaking above 136.45 could lead to a rise toward the 137.70 level before further direction is determined.

Today's support level is 135.00, while the resistance level is 136.50.

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.