Japan's economy is expected to grow in the next quarter.

The Japanese yen remains stable, with investors predicting that the Bank of Japan will maintain its current monetary policy and refrain from raising interest rates soon. However, if the yen weakens excessively, it could trigger another round of market intervention. Meanwhile, the yen faces additional pressure from the strengthening U.S. dollar, buoyed by robust U.S. economic data.

The Business Confidence Index for Japanese manufacturers increased to +7 in October, up from +4 in September, reflecting improved confidence in Japan’s economic outlook. Despite lingering uncertainties over China’s economic recovery, many sectors in Japan reported a positive business outlook, led by industries such as food, chemicals, and electronics. Economic growth is expected to continue improving over the next three months.

Japan's services PMI fell to 47.8 in September, marking the first decline in four months, driven by reduced activity in the service sector. However, the food and beverage industry recorded positive growth, resulting in a slight increase in employment. Most industries also benefited from rising production levels, though challenges with raw material prices persist.

Japan's trade balance recorded a deficit of 294.24 billion yen in September, compared to a surplus of 60.56 billion yen in the same month last year. This deficit exceeded market expectations, which anticipated a shortfall of 237.6 billion yen. Exports contracted significantly, while imports rose by 2.1% to 8.74396 trillion yen, driven mainly by the purchase of electrical machinery, including a 11.4% rise in semiconductor imports, and a 0.4% increase in other machinery, reflecting the country’s focus on advancing technology.

Meanwhile, exports from Japan fell by 1.7% to 9.0382 trillion yen, falling short of the forecasted 0.5% growth. The decline was primarily due to a sharp 9.4% drop in automobile and auto parts exports, impacted by competition from Chinese electric vehicles. However, there remained strong demand for machinery related to semiconductor and IC production. Export levels to China, the U.S., and the Eurozone declined significantly, while exports to Hong Kong, Taiwan, and South Korea increased.

Techical analysis data (5H)

Resistance: 149.73, 149.94, 150.12

Source: Investing.com

Buy/Long 1: If the price touches support in the price range of 149.16 - 149.34 but cannot break the support at 149.34, you may set a TP at approximately 149.94 and SL at around 148.95 or according to your acceptable risk.

Buy/Long 2: If the price breaks the resistance in the price range of 149.73 - 149.94, you may set a TP at approximately 150.12 and SL at around 149.16 or according to your acceptable risk.

Sell/Short 1: If the price touches resistance in the price range of 149.73 - 149.94 but cannot break the resistance at 149.73, you may set a TP at approximately 149.16 and SL at around 150.12 or according to your acceptable risk.

Sell/Short 2: If the price breaks the support in the price range of 149.16 - 149.34, you may set a TP at approximately 148.95 and SL at around 149.94 or according to your acceptable risk.

Pivot point October 19, 2024 11:35 PM. GMT+7