Japan's economy shows a slight improvement trend.

The yen continues to weaken, driven by the dollar's strength amid chaos in the U.S. presidential campaign of former President Donald Trump. Meanwhile, Federal Reserve Chairman Jerome Powell stated that recent data boosts confidence that inflation is returning to the 2% target, supporting the outlook for the Fed to increase rate cuts.

The confidence index among large manufacturers rose to +13 in the second quarter of 2024, amidst improving economic trends in various industries such as chemicals and petroleum products. This improvement is supported by rising demand in the medical field and continuous fuel usage, leading large manufacturers to remain optimistic about business conditions for several quarters ahead.

Retail sales in Japan increased by 3% year-on-year in May, exceeding market forecasts of 2%, as recent wage increases continued to stimulate household consumption. Most sales growth came from categories like pharmaceuticals, cosmetics, machinery, and equipment, which increased by over 5%. Meanwhile, car sales and other personal goods slightly declined.

Japan's trade deficit decreased to 1.221 trillion yen in May, down from a deficit of 1.382 trillion yen in the same month last year, marking a two-month consecutive trade deficit. Despite exports growing faster than imports, Japan's high import rates have kept the trade balance in deficit.

Imports to Japan increased by 9.5% year-on-year, reaching 9.5 trillion yen in May, though this was below market expectations of a 10.4% increase. Most imports were of natural fuels such as petroleum and LNG. Other machinery imports continued to rise, driven by demand for clothing and apparel, with major imports coming from the U.S., China, Hong Kong, and South Korea.

Exports from Japan surged by 13.5% year-on-year to 8.28 trillion yen in May, accelerating from an 8.3% increase in April. Some export data were bolstered by the weakening yen and strong foreign demand, leading to a more than 16.9% increase in transport equipment sales, primarily cars. This was followed by machinery exports due to increased demand for semiconductor production, driven by the rise of AI and electric vehicles (EVs).

Techical analysis data (5H)

Resistance: 158.98, 159.22, 159.59

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 158.02 - 158.38 but cannot break the support at 158.38, you may set a TP at approximately 159.22 and SL at around 157.78 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 158.98 - 159.22, you may set a TP at approximately 159.59 and SL at around 158.02 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 158.98 - 159.22 but cannot break the resistance at 158.98, you may set a TP at approximately 158.02 and SL at around 159.59 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 158.02 - 158.38, you may set a TP at approximately 157.78 and SL at around 159.22 or according to your acceptable risk.

Pivot point July 16, 2024 08:18 PM. GMT+7