USDJPY: the pair declines ahead of the US ADP employment data

The USDJPY rate fell below 154.00 on Wednesday amid rising wages in Japan. Today, the market will focus on the US ADP employment statistics. Find out more in our analysis for 5 February 2025.

USDJPY forecast: key trading points

• Japan’s services Purchasing Managers’ Index for January was revised upwards to 53.0 points
• Japan’s labour cash earnings rose by 4.8% year-on-year in December 2024, up from 3.9% in November
• USDJPY forecast for 5 February 2025: 153.00 and 154.50

Fundamental analysis

The Japanese yen is strengthening on Wednesday amid positive economic statistics, with the services PMI and labour cash earnings showing positive dynamics. Wage growth may lead to an increase in the country’s inflation rate, which will give grounds for the Bank of Japan to further raise the benchmark interest rate.

Automatic Data Processing Inc. (ADP) will release US employment statistics during today’s American session. Stronger-than-forecast data (+150 thousand jobs) will support the US dollar and the USDJPY pair could reverse upwards again. Conversely, weaker figures could push the quotes lower.

USDJPY technical analysis

On the H4 chart, the USDJPY pair is undergoing a downward correction after the previous growth. The pair is trading in a descending price channel, with the price approaching its lower boundary. The key support level is currently at 152.50.

Today’s USDJPY forecast suggests that the pair has the potential for an upward reversal and further growth if the bulls push the quotes above 153.70. Conversely, if the bears gain a foothold below 153.70, the price could decline to 152.50.

Summary

The USDJPY rate plunged to the area around 153.00, driven by Japan’s positive economic statistics. Today, market participants are awaiting the US ADP employment statistics.