Daily Analysis USDJPY - 25 July 2023

On Monday, the preliminary S&P Global US Manufacturing PMI data surpassed expectations, coming in at 49, which was higher than the market's anticipated 46.4 and also above the previous reading of 46.3 in June. However, the Services PMI declined from 54.4 to 52.4. As a result, the US S&P Global Composite PMI fell to 52, down from June's 53.2.

In addition to the mixed US PMI figures, the data released last week indicated that inflationary pressures are easing, and the labor market remains tight. These findings have sparked speculation that the Federal Reserve might conclude its tightening monetary policy after the July meeting.

On Friday, the Bank of Japan (BoJ) is set to announce its monetary policy. BoJ Governor Kazuo Ueda dismissed speculation of a Yield Control Curve policy change and asserted that achieving the 2% inflation target would still require additional efforts. This suggests that Japanese policymakers are likely to maintain a dovish policy stance to sustain inflation at a level above 2%. Furthermore, BoJ policymakers prefer to assess more data to ensure wages and inflation continue to rise before considering any policy modifications.

After reaching the 142.00 resistance level the pair is coming back with the next support around the 140.50 level followed by the 139.00 area.

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