Solid News
Poor Prospects for Japan's Economic Recovery
2/28/2023 12:01 PMAgainst the positive dynamics of the American currency, the yen is losing its positions won earlier, and the USD/JPY pair is trading at 136.27.
The index of leading economic indicators, which market experts traditionally pay special attention to in Japan, fell by 0.5% in February, indicating that there are no prospects for the recovery of the national economy soon. This is confirmed by the morning industrial production report, which fell 4.6% in January after rising 0.3% in December, showing the largest monthly drop since July 2022. Data on core inflation from the Bank of Japan amounted to 3.1% YoY, unchanged from the previous period.
The US dollar is holding around 104.700 in the USD Index, supported by yesterday's report on pending home sales, whose index rose to 8.1% in January from 1.1% earlier, indicating increased demand for real estate.
On the daily chart, the trading instrument is moving above the resistance line of the global downwards channel with dynamic boundaries at 126.00–131.00, having almost reached the base correction of 38.2% Fibonacci around 136.87.
Technical indicators remain in a buy signal state: fast EMAs on the Alligator indicator move away from the signal line, and the AO histogram forms upward bars above the transition level.
Resistance levels: 136.87, 139.73. | Support levels: 135.10, 133.35.