Fundamental view:

US dollar edged higher against its yen counterpart during the trading course of the week. The US Bureau of Labor Statistics reported that Nonfarm Payrolls in March rose by 431,000. The reading was far better than the market expectation of 80,000, Moreover, February’s print got revised higher to 750,000 from 678,000. The March NFP report is the last before the May 4 FOMC meeting. The Fed is expected to increase the fed funds rate by 0.5%. Moreover,  US T-bond yields continued to push higher as the publication revealed that Average Hourly Earnings climbed to 5.6% from 5.2% on a yearly basis. All the catalysts underpinned the USD bulls.

On the other hand,  Japanese economic data for February was mixed. Retail Trade (sales) fell 0.8% for the month and year on forecasts of -0.3% and flat. Industrial Production was slower for the month at 0.1% than the 0.5% prediction but better for the year, 0.2% vs -2.3%. 

In this week, Japan Jobs to Applicants Ratio on 29^th March and US GDP quarterly report on 30^th March  underpinned the downtrend whereas Japan Retail Sales monthly report on 30^th March, US Core PCE Price Index yearly report  on 31^st March, Nonfarm Payrolls report on 1^st April underpinned the uptrend for the pair.

The major economic events deciding the movement of the pair in the next week are Japan Markit Services PMI, US ISM Non-Manufacturing PMI, Fed Governor Brainard Speech at Apr 05, EIA Crude Oil Stocks Change, FOMC Minutes at Apr 06, BoJ Board Member Noguchi Speech, US Initial Jobless Claims at Apr 07 and US WASDE Report at Apr 08.

USD/JPY Weekly outlook:

Technical View:

Last week’s high was 2.18% higher than the previous week. Maintaining high at 125.10 and low at 121.28 showed a movement of 382 pips.

In the upcoming week we expect USD/JPY to show a bullish trend. The currency pair is trading above the 200 Simple Moving Average and the MACD trades to the upside. A solid breakout above 124.61 may open a clean path towards 126.77 and may take a way up to 128.43. Should 120.79 prove to be unreliable support, the USDJPY may sink downwards 119.13 and 116.97 respectively. In H4 chart, Formation of bullish pennant pattern indicates reversal of the trend creating prospects of a bullish trend Along with a bullish harami formation braces our expectation.