- The USD/JPY gains temporary ground about 145.00 while the US dollar recovers initial profits.
- The Japanese economy contracted 0.2% in the first quarter of the year.
- Investors await the data of the Michigan preliminary survey of the US for May.
The USD/JPY pair recovers some of its initial losses and bounces about 145.50 during the American session on Friday, although it follows 0.1% down. The torque recovers as the US dollar bounces and stabilizes, with investors waiting for the preliminary data of Michigan’s consumer’s feeling and inflation expectations for May, which will be published at 14:00 GMT.
The US dollar index (DXY), which measures the value of the dollar against six main currencies, remains plane around 100.80.
Investors will pay special attention to the US consumer’s feeling index, which fell to 52.2 in April due to the commercial war with China. This was the lowest figure since July 2022.
Meanwhile, the Japanese yen (JPY) surpasses its peers despite the weak data of the Gross Domestic Product (GDP) of the first quarter. The Japanese economy contracted 0.2% in the period from January to March, while a fall of 0.1% was expected. In the last quarter of 2024, the economy grew at a robust rate of 0.6%.
And in Japanese price today
The lower table shows the rate of change of Japanese Yen (JPY) compared to the main currencies today. Yen Japanese was the strongest currency against the Swiss Franco.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.07% | 0.14% | -0.12% | -0.00% | -0.10% | -0.31% | 0.25% | |
| EUR | 0.07% | 0.21% | -0.03% | 0.05% | -0.02% | -0.24% | 0.31% | |
| GBP | -0.14% | -0.21% | -0.25% | -0.15% | -0.24% | -0.44% | 0.11% | |
| JPY | 0.12% | 0.03% | 0.25% | 0.10% | -0.02% | -0.23% | 0.34% | |
| CAD | 0.00% | -0.05% | 0.15% | -0.10% | -0.12% | -0.29% | 0.25% | |
| Aud | 0.10% | 0.02% | 0.24% | 0.02% | 0.12% | -0.20% | 0.35% | |
| NZD | 0.31% | 0.24% | 0.44% | 0.23% | 0.29% | 0.20% | 0.55% | |
| CHF | -0.25% | -0.31% | -0.11% | -0.34% | -0.25% | -0.35% | -0.55% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Japanese yen from the left column and move along the horizontal line to the US dollar, the percentage change shown in the picture will represent the JPY (base)/USD (quotation).
The USD/JPY decreases significantly from a maximum of almost six weeks of 148.54 to about 145.00 on Friday. The 20 -day exponential (EMA) mobile average about 145.20 continues to support the torque.
The 14 -day RSI struggles to exceed 60.00. A new bullish impulse would be triggered if the RSI exceeds level 60.00.
An upward movement towards the psychological level of 150.00 and the maximum of March 28, 151.21 would occur if it breaks above the maximum of May 13, 148.57.
The asset would face more falls towards the minimum of April 22, 139.90 and the minimum of July 14, 2023 of 137.25 if it breaks below the minimum of May 7, 142.42.
USD/JPY DAILY GRAPH
(This story was corrected at 13:45 GMT to say in the technical part that the 14 -day RSI struggles to overcome 60.00. A new bullish impulse would be triggered if the RSI “exceeds” level 60.00 and not if the RSI falls below level 60.00)
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
