The USD/JPY pair is testing the mark of 136.35, consolidating at the local highs of December 20, updated earlier, and preparing to continue the upward movement with a target at 138.70 after the publication of weak macroeconomic statistics from Japan.
The volume of industrial production in monthly terms in January decreased by 4.6%, which was lower than the forecast at -2.6% and the previous value of 0.3%. The last time the indicator fell by a large amount was only in July 2022 (-7.5%). On Friday, March 3, data on the basic consumer price index in the Tokyo region for February will be published: in annual terms, analysts predict an indicator of 3.3% after February's 4.3%. The implementation of the forecast may lead to a weakening of the yen, as investors will lose hope for an interest rate increase by the Bank of Japan in the near future.
The "bullish" dynamics of the USD/JPY pair is supported by the overall growth of the US currency in relation to its main competitors. At the moment, the peak of the US Fed interest rate in 202.3 is projected at 5.4%. The rhetoric of the regulator's representatives only reinforces this point of view, therefore, in the mid-term, we can expect the growth of the instrument to the area of the next resistance level of 138.70.
The long-term trend is downward. The growth that could be observed in February is a correction in which market participants broke the resistance level of 134.70 and are now preparing to continue buying with a target at 138.70. After reaching the mark of 138.70, it will be possible to consider new sales of the instrument if fundamental factors favor this.
The mid-term trend is upward. The growth target is target zone 2 (138.18–137.61), in case of a breakout of which growth is likely to continue with a target at target zone 3 (144.09–143.47). New purchases can be considered on the correction to the key support of the trend 131.56–131.05. The first target for these purchases will be the maximum of the current week in the area of the level of 136.85.
Resistance levels: 138.70, 142.00. | Support levels: 134.50, 130.90.