US Retail Sales and Economic Outlook

In addition to Japan’s data, US retail sales later in the session on Tuesday could also influence USD/JPY movements.

Economists expect retail sales will increase by 0.2% in August, down from a 1.0% rise in July.

Accounting for 60% of GDP, better-than-expected figures may boost expectations of a soft US economic landing and strengthen the US dollar. A pickup in consumer spending could push the US dollar toward 142 ahead of Wednesday’s Fed interest rate decision. Easing fears of a hard US economic landing may temper expectations of aggressive Fed rate cuts to support the US economy.

Short-term Forecast for USD/JPY

USD/JPY trends will likely depend on Bank of Japan commentary and Wednesday’s Fed interest rate decision. Hawkish comments from the BoJ and a more dovish-than-expected Fed rate path may drag the USD/JPY below 139.500.

However, investors should also consider key economic indicators from Japan and the US that could fuel USD/JPY volatility.

Investors should remain alert with Wednesday’s Fed interest rate decision looming. Monitor real-time data, central bank insights, and expert commentary to adjust your trading strategies accordingly. Stay updated with our latest news and analysis to manage USD/JPY volatility.

USD/JPY Technical Analysis

Daily Chart

The USD/JPY remains well below the 50-day and 200-day EMAs, affirming bearish price signals.

A USD/JPY break above the 141.032 resistance level could support a move toward the 142.500 level. Furthermore, a USD/JPY return to the 142.500 level may give the bulls a run at the 143.495 resistance level.

Japan’s Tertiary Industry Activity Index, Bank of Japan commentary, and US retail sales numbers require consideration.

Conversely, a drop below the September 16 low of 139.576 could bring the 137.712 support level into play.

The 14-day RSI at 31.12 suggests a USD/JPY drop below 140 before entering oversold territory.