The greenback rose against the yen yesterday following the release of better-than-anticipated first-time jobless claims data. Japan’s economic data was mixed. Specifically, the country’s current account surplus missed estimates. This enabled the USD/JPY pair to gain ground. Overall, the USD/JPY pair rallied from a low of 145.43 to a high of 147.29 in the past 24 hours.
Japan’s bank lending increased by 3.20% year-on-year in July 2024, remaining steady since June and aligning with market expectations. Furthermore, according to the Bank of Japan, outstanding loans held by Japan’s top, domestic, and “shinkin” banks amounted to ¥624.70 trillion yen. The increase in loans was led by major and domestic banks, with growth of 4.20% and 3.10%, respectively. Similarly, “shinkin” banks recorded a loan growth of 0.50%.
According to Japan’s Ministry of Finance, the country’s current account surplus rose to ¥1.534 trillion in June 2024 from ¥1.52 trillion in June 2023, but missed market forecasts of ¥1.79 trillion. The reported figure reflects the 17th successive monthly current account surplus.
Specifically, the goods account surplus increased to ¥556.3 billion in June 2024 from ¥328 billion last year. Exports grew by 5.90% y-o-y in June 2024 to ¥9.17 trillion, while imports rose by 3.40% to ¥8.61 trillion. During the same period, the secondary income deficit narrowed to ¥120.70 billion from ¥132.40 billion. Also, the primary income surplus narrowed by 12.30% to ¥1.474 trillion from ¥1.68 trillion. Concurrently, the service deficit widened to ¥375.80 billion from ¥356.20 billion.
Japan’s economy watchers sentiment index improved to 47.50 in July from 47 in June, but missed forecasts of 47.80. The reported figure reflects the second successive month of gains, hitting the highest level since March as the gauge for household budget trends increased, primarily due to advances in the service industry.
Additionally, the corporate trends index improved, fueled by an increase in the non-manufacturing sector, and the gauge for employment continued to rise. Concurrently, the economic outlook index increased to 48.30 in July from 47.90 in June, reflecting the second consecutive monthly increase to reach a three-month high, amidst hopes that a rebound in the economy will happen in spite of worries over high inflation.
In the US, the Department of Labor revealed a decline in unemployment claims to 233,000 in the week that ended on August 3, from 250,000 (upwardly revised from 249,000) in the previous week, bettering forecasts of 241,000. The four-week moving average was 240,750, an increase from 238,250 (upwardly amended from 238,000) in the previous week.
The upbeat US employment data is expected to keep the USD/JPY pair slightly bullish in the near term.
The historical price chart indicates that the USD/JPY pair is rising after testing the support at 145.50. The next resistance is anticipated to be only near 154.40. Additionally, the currency pair is trading above its 50-day moving average, while the RSI indicator is ascending towards the bullish zone. Therefore, we anticipate the USD/JPY pair to remain in an uptrend for the forthcoming trading sessions.
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