• USD/JPY recovered after US Durable Goods declined more than expected.
• Japanese National CPI inflation fell, but less than expected.
• US GDP, PCE inflation due in the back half of the trading week.

USD/JPY fell early Tuesday before finding a floor near 150.20, with the US Dollar (USD) paring away near-term losses after US Durable Goods Orders declined more than expected in January. Markets will be pivoting to focus on US Gross Domestic Product (GDP) growth and Personal Consumption Expenditure Price Index (PCE) inflation data due on Wednesday and Thursday, respectively.

Japan’s National Consumer Price Index (CPI) eased from previous figures, but still fell less than expected. Headline annualized National CPI slipped to 2.2% from 2.6% for the year ended January. Core National CPI fell to 2.0% from 2.3% for the same period, but markets were expecting a print of 1.8%.

US GDP, PCE inflation in the barrel

US MoM Durable Goods Orders declined to -6.1% in January, missing the -4.5% forecast. The previous print also got revised lower to -0.3% from 0.0%.

Wednesday will see US GDP growth for 2023’s fourth quarter, and the annualized Q4 GDP is forecast to hold steady at 3.3%. Thursday’s US PCE inflation is expected to see a slight uptick on the near end of the curve, with MOM Core PCE forecast to rise to 0.4% from 0.2% in January. Core annualized US PCE is expected to ease to 2.8% from 2.9% for the year ended January.

USD/JPY technical outlook

USD/JPY sees near-term technical resistance from 150.75 as the pair struggles to mount the 151.00 handle. The pair remains capped into the midrange as markets churn, and 150.50 remains a key cycle level for USD/JPY.

Longer term, the pair remains firmly pinned into bull country, with the pair trading into technical resistance near last November’s peak bids near 152.00. USD/JPY has closed in bullish territory for six of the last seven consecutive trading weeks.

USD/JPY hourly chart

USD/JPY daily chart