Daily Analysis USDJPY - 17 July 2023

There is a lack of economic indicators from Japan that could affect the monetary policy stance of the Bank of Japan, which remains extremely accommodative.

However, the focus will be on economic indicators from China, including Q2 GDP, industrial production, and retail sales, as they will set the tone for market sentiment. So far, the markets have not shown a flight-to-safety response, as expectations of a stimulus package from Beijing have mitigated the impact of weak Chinese data.

If the GDP and industrial production figures turn out to be notably weak, it could raise doubts about Beijing's ability to provide adequate support to its economy.

Additionally, the NY Empire State Manufacturing data for July will be closely monitored, but unless there is a significant decline, it is unlikely to have a notable impact on market risk sentiment.

The USD/JPY pair has received support at the notable historical level of 138.00 after experiencing six consecutive days of decline. Currently, a corrective movement is underway, with the initial level located at 138.70, followed by 140.25. Additionally, both the 2-year and 10-year yields are undergoing corrections, which appears to be beneficial for the pair as well.

Resistance 3	Resistance 2	Resistance 1	Support 1	Support 2	Support 3
142.00	141.20	140.22	139.00	138.00	136.00