USD/JPY slides further below 145.00 after US data

USD/JPY slides further below 145.00 after US data

Time Stamp: August 23, 2023 11:06 AM
Source Node: 2839895

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  • The US S&P Global PMI came in below expectations.
  • The US Dollar declined across the board following the release of the data.
  • USD/JPY appears vulnerable to further losses as long as it remains below 145.00.

The USD/JPY broke below 145.00, falling to its lowest level in almost two weeks. This decline was triggered by the release of US economic data that came in below expectations, leading to a decrease in US Treasury yields and weakening the Greenback. 

US PMI data disappoints

The S&P Global Composite PMI unexpectedly dropped from 52 to 50 in August, according to preliminary data. The Services PMI fell from 52.3 to 51, and the Manufacturing PMI tumbled to 47 from 49. These numbers indicate a reduction in demand for the US Dollar.

On a different report, New Home Sales showed a positive surprise, reaching an annual rate of 714K, surpassing expectations of 705K. However, these numbers did not alter the overall post-PMI trend of the US Dollar.

Earlier in the day, the Japanese PMI was among the few to exceed expectations, with the Manufacturing Index rising from 49.6 to 49.7 and the Services Index from 53.8 to 54.3.

The Japanese Yen is among the top performers on Thursday, benefiting from falling government bond yields. EUR/JPY is trading at two-week lows below 157.00, while GBP/JPY has lost more than 200 pips.
The focus now shifts to the Jackson Hole Symposium, where Federal Reserve Chair Jerome Powell will deliver a speech on Friday. Before that, on Thursday, the market will be paying attention to US Jobless Claims and Durable Goods Orders data.

USD/JPY accelerates bearish correction

The USD/JPY has bottomed at 144.64, reaching the lowest level since August 14. It remains near these lows, exhibiting strong negative momentum. As long as the pair stays below 145.00, further losses seem likely.

On the downside, the next support levels emerge at 144.40 (August 11 low) and 144.05. If the pair manages to recover above the 145.00 area, it would alleviate the bearish pressure.

Technical levels 

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