FX.co ★ mughalfx | USD/JPY

USD/JPY Daily Timeframe Analysis The USD/JPY pair is trading under the influence of a mix of U.S. economic indicators, Federal Reserve commentary, and Japanese economic conditions. Today’s movement hinges on the interplay between U.S. economic resilience and Japan’s monetary stance, as the Bank of Japan (BOJ) continues its ultra-loose policy, while the Federal Reserve remains focused on inflation management. The U.S. data shows a moderately stable yet mixed economic picture. The unemployment rate for August came in at 2.6%, slightly higher than expected, signaling a slight softening in the labor market. However, the Jobs/Applications ratio at 1.20 suggests demand for workers remains above supply, keeping the labor market relatively tight. This could maintain wage pressures, fueling inflationary concerns. On the PMI front, the ISM Non-Manufacturing PMI stood at 51.8, reflecting moderate expansion in services, a key driver of the U.S. economy. Manufacturing & Services PMI at 51.30% also indicates ongoing economic resilience. However, new orders in the services sector came at 51.8, slightly weaker than the prior 55.0, hinting at slowing momentum. Durables and factory orders offered mixed signals Durables ex-defense rose 1.0% MoM, while overall factory orders grew by just 0.6%, suggesting cautious business investment. On the Japanese side, the au Jibun Bank Services PMI stood at 53.3, comfortably in expansionary territory, suggesting services remain a supportive driver of the economy. Despite this, the BOJ remains cautious, as inflation is seen as cost-push rather than demand-driven. Governor Ueda’s comments will be critical for market direction, but with the BOJ committed to yield curve control and accommodative measures, there is little sign of a policy shift in the near term. Without intervention threats from Japanese authorities, the yen remains under pressure. Fundamentally, the U.S. economy continues to show resilience, particularly in the services sector, while Japan remains anchored to ultra-loose monetary policy.

The USD/JPY pair remains in a strong bullish structure, with price action continuing to hold firm above key moving averages and maintaining upward momentum, though signs of near-term consolidation are appearing. The 50-day SMA, currently near the 148.00 zone, acts as immediate support and indicates short-term bullish momentum remains intact. The 100-day SMA, positioned around 146.50, serves as medium-term protection in case of deeper corrections, while the 200-day SMA, lying near 143.80, highlights that the long-term bullish foundation of USD/JPY is still unchallenged. As long as the price remains above the 50-SMA level, the market bias favors the bulls, and the pair is likely to test higher resistances, especially the psychological 150.00 handle. Adding to this, Fibonacci retracement levels from the recent swing low around 145.80 to the swing high of approximately 149.80 provide important zones to monitor. The 23.6% retracement at 148.90 is acting as the first line of support, while the 38.2% level at 147.90 and the 50% level at 147.00 represent deeper corrective zones where dip buyers are expected to re-enter the market. The 61.8% retracement at 146.10 aligns with the broader structure and coincides closely with the 100-SMA, making it a critical floor for the pair; as long as price holds above this zone, the bullish outlook is preserved. If Fed officials today emphasize the need for vigilance against inflation and leave the door open for additional tightening, USD/JPY is likely to push higher toward the 150.00 psychological level. Conversely, any hint of dovishness or growing concerns about slowing U.S. growth could trigger profit-taking, bringing the pair back toward 148.00–148.50 support. Overall, fundamentals continue to support dollar strength against the yen. Unless the BOJ signals policy adjustments or Japanese authorities hint at FX intervention, the bias remains bullish for USD/JPY in the short term. A near-term range of 148.00–150.00 seems likely, with upside momentum favored if Fed rhetoric stays hawkish.