• After last week’s losses, the USD/JPY is still just below 147.00.
• Early on Monday, Japan’s Q4 GDP report was below expectations.
• Mixed results are predicted for US CPI inflation.

The USDJPY pair began the week sharply lower than its early highs above 150.00 in March, trading near the lower end of the 147.00 handle. The US CPI inflation report is expected on Tuesday, and markets are bracing for it as investors look for signals that an early rate cut by the Federal Reserve (Fed) may be necessary if inflation declines quickly enough.

Despite missing estimates, Japan’s GDP for the fourth quarter increased from the previous quarter’s -0.1% decrease. GDP for Q4 came in at 0.1%, below the 0.3% estimate. Although GDP growth was still better than the prior figure of -0.4%, Japan’s annualized Q4 GDP also missed expectations, coming in at 0.4% instead of the predicted comeback of 1.1%.

The US MoM CPI figure for February is anticipated to increase from 0.3% to 0.4% as the effects of uneven inflation persist. The core MoM CPI, which does not include energy and food costs, is predicted to decrease slightly from 0.4% to 0.3%.

The core YoY CPI is predicted to be 0.3% instead of the previous 0.4%, and the annualized CPI is expected to remain at 3.1%.

Technical forecast for USD/JPY

With the pair trapped on the south side of the 147.00 handle into the early Tuesday session, USD/JPY is noticeably on the side as we start a new trading week. Between the pair’s all-time highs of 150.88 in February and March’s top bids of 150.70, there has been a 2.5% decline.

A technical pull down the chart paper was extended last week, as the previous week’s break of an eight-week winning streak was rushed into the opposing side. After closing flat or running in the green for eight weeks, USD/JPY is moving back into bear territory. The 200-day Simple Moving Average (SMA) is rising to 146.22, marking the last significant technical floor located at the final swing low into the 146.00 handle.

USD/JPY hourly chart