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Wages in Japan Continue to Rise

2/8/2023 12:44 PM

The quotes of the USD/JPY pair are correcting around 131.18; however, the yen remains one of the few world currencies that successfully resist the local growth of the American dollar, the recent peak of which occurred at the time of the publication of data on the Japanese labor market.

The acceleration of the Labor Cash Earnings from 1.9% to 4.8% in December was taken positively by investors. The local increase could not completely change the situation with consumer spending; however, the decline was noticeably halted, and in December the Overall Household Spending index fell by 2.1%, which led to a decrease in the annual indicator by 1.3% against -1.2% in November.

In turn, the quotes of the American currency slowed down the growth, consolidating around 103.200 in the USD Index. The hopes of investors to hear hints of further actions by the US Federal Reserve during yesterday's speech by the Chair of the Fed, Jerome Powell, did not come true. The official urged congressmen to take a decision to raise the national debt ceiling, citing the fact that without it the regulator would not be able to protect financial markets. Hours earlier, President Joe Biden had made a similar speech.

On the daily chart, the USD/JPY pair is trading above the resistance line of the global downward channel with dynamic boundaries of 129.00-120.00.

Technical indicators are holding a sell signal, which continues to weaken: fast EMAs on the Alligator indicator remain below the signal line, despite the convergence, and the AO oscillator histogram, trading below the transition level, continues to form upward bars.

Support levels: 129.54, 126.30. | Resistance levels: 132.67, 135.43.

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