Created
: 2025.08.06
2025.08.06 11:50
The Japanese Yen (JPY) oscillates in a range against its American counterpart during the Asian session on Wednesday and moves little following the release of unimpressive macro data. Inflation-adjusted real wages in Japan fell for the sixth straight month in June and fueled concerns about a consumption-led recovery. This comes on top of domestic political uncertainty and tempers bets for an immediate rate hike by the Bank of Japan (BoJ). Adding to this, signs of stability in the equity markets act as a headwind for the safe-haven JPY.
Meanwhile, the BoJ revised its inflation forecast at the end of the July meeting and left the door open for further interest rate hikes by the end of this year. This might hold back the JPY bears from placing aggressive bets. The US Dollar (USD), on the other hand, might struggle to attract any meaningful buyers amid expectations for rate cuts by the Federal Reserve (Fed), bolstered by the disappointing release of the US ISM Services PMI on Tuesday. This, in turn, should keep a lid on the USD/JPY pair's overnight bounce from a two-week low.
The overnight resilience below the 50% retracement level of the rally from the July swing low and the subsequent recovery favors the USD/JPY bulls. Moreover, oscillators on the daily chart have again started gaining positive traction and back the case for additional gains. That said, any further move up beyond the 147.75 area, or the 38.2% Fibonacci retracement level, might confront some hurdle near the 148.00 round figure. A sustained move beyond the latter will suggest that spot prices have formed a near-term bottom and pave the way for further strength towards the 148.45-148.50 intermediate hurdle en route to the 149.00 neighborhood, or the 23.6% Fibo. retracement level.
On the flip side, the Asian session low, around the 147.45 region, now seems to act as an immediate support for the USD/JPY pair. Any further downfall could be seen as a buying opportunity near the 147.00 round figure. However, some follow-through selling below the 50% retracement level, around the 146.85 area, which coincides with the 200-period Simple Moving Average (SMA) on the 4-hour chart, could make spot prices vulnerable to accelerate the fall towards the 146.00 round figure. The downward trajectory could extend further and eventually drag spot prices to the 61.8% Fibo. retracement level, around the 145.85 area, en route to the 145.00 psychological mark.
This indicator, released by the Ministry of Health, Labor and Welfare, shows the average income, before taxes, per regular employee. It includes overtime pay and bonuses but it doesn't take into account earnings from holding financial assets nor capital gains. Higher income puts upward pressures on consumption, and is inflationary for the Japanese economy. Generally, a higher-than-expected reading is bullish for the Japanese Yen (JPY), while a below-the-market consensus result is bearish.
Read more.Last release: Tue Aug 05, 2025 23:30
Frequency: Monthly
Actual: 2.5%
Consensus: 3.2%
Previous: 1%
Created
: 2025.08.06
Last updated
: 2025.08.06
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