Japanese Yen rises as US jobless claims fail to support US Dollar

• USD/JPY trades lower as the Japanese Yen recovers some ground and the Greenback fails to benefit from stronger US labor data.
• US Initial Jobless Claims fell to 215K, below expectations of 218K.
• Japan’s June PPI is in focus, potentially supporting BoJ caution and helping the Yen.

USD/JPY trades lower near the 162.30 area on Thursday, retreating from recent highs as the Japanese Yen (JPY) recovers some ground. The US Dollar (USD) fails to receive support from stronger-than-expected United States (US) labor market data.

US Initial Jobless Claims fell to 215K, below expectations of 218K and the previous 217K, while the four-week average eased to 218.75K from 222.5K. The data suggests that layoffs remain limited, helping the Greenback avoid deeper losses. However, Continuing Jobless Claims rose slightly to 1.814 million from 1.806 million, showing that workers are taking longer to find new jobs.

In Japan, attention turns to the June Producer Price Index (PPI) set to be released early on Friday. The monthly reading is expected to rise 0.3%, slowing from 0.9% previously, while the annual figure is expected to accelerate to 6.8% from 6.3%. Stronger producer inflation could support expectations that the Bank of Japan (BoJ) may stay cautious about keeping policy too loose, offering some support to the Yen.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 162.37, maintaining a constructive bullish bias as it remains above both the 20-period Simple Moving Average (SMA) at 162.27 and the 100-period SMA at 161.74. The pair is also trading over the nearby horizontal support at 162.28, suggesting a firm underlying base, while the Relative Strength Index (RSI) at 54.50 points to moderately positive momentum without yet signaling overbought conditions.

On the topside, initial resistance emerges at 162.51, with further hurdles clustered higher at 162.65 and 162.71, where buyers could face profit-taking. On the downside, the immediate floor is seen at the 162.28 horizontal level, followed by dynamic support at the 20-period SMA near 162.27 and then the 100-period SMA at 161.74, which together underpin the broader uptrend as long as they remain intact.

(The technical analysis of this story was written with the help of an AI tool. Know more.)