On April 9, the USD/JPY currency pair traded firmly near the 158.90 level, supported by robust US economic data and persistent inflation, as highlighted in the latest Personal Consumption Expenditures (PCE) report. Headline PCE inflation rose 0.4% month-over-month, while core PCE also increased by 0.4%, marking the third consecutive strong monthly gain. On an annual basis, core inflation stands at 3.0%, remaining above the Federal Reserve's 2% target, reinforcing expectations for a 'higher-for-longer' interest rate policy from the Fed [1].
Consumer spending in the US jumped 0.5%, indicating continued demand resilience, though this was largely attributed to higher prices rather than real growth. Initial Jobless Claims edged up to 219,000 but stayed historically low, signaling a solid labor market. Despite a downward revision to US Gross Domestic Product (GDP), the change was not significant enough to alter Fed policy expectations toward easing [1].
Technical analysis shows USD/JPY trading at 158.95, just below the 20-period simple moving average (SMA) at 159.12 and the 100-period SMA at 159.21. The pair's slip below these moving averages suggests that rallies are being sold, with the Relative Strength Index (RSI) near 47 indicating fading bullish momentum. Resistance levels are noted at 158.96, 159.10, and 159.12, while immediate support is at 158.83. A sustained break below this support could lead to a deeper correction in the near term [1].
CONCLUSION
Elevated PCE inflation and resilient US economic data have reinforced USD strength against the JPY, keeping the pair near 158.90. While technical indicators suggest fading bullish momentum, the market remains supported by expectations of sustained Fed policy tightening. Investors should monitor key support and resistance levels for potential near-term corrections.