General analysis USDJPY for 07.04.2022
Current Dynamics
Japan updates the format of its stock exchange to activate the inflow of investments. Limitations in the Chinese city of Shanghai have had a negative effect on Japanese companies. Household spending increased in February on 1.1%. The wage increases in Japan in February at 1.2%.
The Tokyo Stock Exchange has changed its format and opened in a new trading session on April 4. Now three new levels of the stock market called Prime, Standard, Growth will replace the previously existing 4 sections of the Tokyo Stock Exchange. This change is aimed at introducing stricter listing standards and attracting foreign investment. Reminder that investment in Japanese stocks has been declining since mid-January.
Sony Group suspended operations at its Shanghai factory because of restrictions related to the coronavirus pandemic. Hitachi stopped production factories that produces elevators and auto parts.
According to the data published by Japanese government, Japanese household spending increased 1.1% in February compared to February last year and decreased 2.8% compared to January. Also in February, the wages increased by 1.2% compared to February 2021. So regular wages, including base pay, increased by 0.9%, and irregular wages, including overtime, increased by 5.8%. Also, it is worth mentioning that wage growth for part-time workers was 1.3%. At the same time the PMI in service sector in March made 49.4 while experts forecasted the index reading at 48.7.
Today at 01:50 (GMT+2) will release data on foreign investment in Japanese equities. Also at 03:00 (GMT+2), Bank of Japan Board Member Asahi Noguchi Speech will be held. Later the same day, at 14:30 (GMT+2) the U.S. will release data on initial jobless claims.
Support and resistance levels.
USD/JPY trades in the corridor between 61.8 and 76.4 Fibonacci levels. The instrument is trading in a wide sideways corridor. The RSI oscillator is at the top near the 70 level.
- Support levels: 123.63, 123.17, 122.72, 122.16, 121.25
- Resistance levels: 124.20, 125.10
Trading scenarios
- Long positions can be opened above the level of 124.20 with a target of 125.10 and a stop loss of 123.63 Implementation period: 1-3 days
- Short positions can be opened from below the level of 123.63 with the target of 122.72 and stop-loss 124.20 Implementation period: 1-3 days