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Japanese Inflation Shows Signs of Slowing Down

3/24/2023 12:56 PM

Against the negative dynamics of the US currency, the USD/JPY pair is correcting at 130.06.

The yen is trying to continue the growth, which began on Tuesday after the publication of a summary of opinions of the Bank of Japan, replete with positive estimates of the future dynamics of economic indicators. Today, positive dynamics are supported by inflation data, which coincided with the regulator's forecasts: the national consumer price index in February was 3.3%, down from 4.3% in January, while the core indicator, which excludes food and fuel prices, fell to 3.1% from 4.2% previously. The index of business activity in the manufacturing sector increased to 48.6 points from 47.7 points earlier, and in the services sector – to 54.2 points from 54.0 points earlier.

The US dollar has slowed down the decline and today is trading at 102.200 in the USD Index, supported by data on the labor market and the real estate sector. Initial jobless claims fell to 191.0K from 192.0K earlier, and the number of building permits issued in the US increased to 1.550M from 1.339M earlier. Thus, sales of new housing increased to 640.0K from 633.0K, which is already close to last spring.

On the daily chart, the trading instrument is moving within a corrective trend, holding above the resistance line of the local channel of 130.00.

Technical indicators strengthen the sell signal: fast EMAs on the Alligator indicator move away from the signal line, expanding the range of fluctuations, and the AO histogram forms downward bars below the transition level.

Resistance levels: 131.60, 135.00. | Support levels: 129.00, 125.50.

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