USD/JPY declines: Market unfazed by weak Japanese statistics
|On Wednesday, the USDJPY pair consolidated near 147.50, extending the previous session's decline, despite weak Japanese foreign trade figures.
Exports dropped by 2.6% y/y in July, marking the steepest decline in over four years, largely due to pressure from US tariffs. Imports fell by 7.5%, the fourth drop since the beginning of the year. However, the data still came in better than expectations, which pointed to a 10.4% decline.
In contrast, equipment orders — a proxy for capital investment — rose unexpectedly in June, following two months of contraction, signalling some resilience in corporate spending.
Meanwhile, investors remain uncertain about the Bank of Japan’s future steps. Governor Kazuo Ueda maintains a cautious stance, highlighting that core inflation is still below the 2.0% target.
The yen has also seen temporary demand as a safe-haven asset, supporting its appreciation.
Technical analysis of USD/JPY
On the H4 USDJPY chart, the market continues to develop a downward wave towards 146.14. This level is expected to be reached today. A temporary rebound to 147.30 cannot be ruled out. Following that, we anticipate a further decline to 145.45, with the potential for the trend to extend to 144.30. The target remains local. This bearish scenario is technically supported by the MACD indicator, whose signal line is below zero and pointing strictly downwards, indicating ongoing downside momentum.
On the H1 chart, the market is shaping a downward wave structure towards 146.12. Today, we are considering a short-term move to 147.12, followed by a potential growth link to 147.60. After that, the market is likely to decline again to 146.60, and further to 146.12, continuing the bearish trend. The Stochastic oscillator confirms this view, with its signal line below the 50 level, directed sharply towards 20, reflecting a strong bearish bias.
Summary
Despite weak trade statistics, USDJPY is falling amid resilient investment data and growing demand for the yen as a safe-haven. Technical indicators point towards a continued downward trend, with key targets at 146.14, 145.45, and 144.30, while any rebounds are likely to remain temporary.
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