USD/JPY Pulls Back From Session Highs

The USD/JPY currency pair retreated from its session highs of approximately 154.58 to trade around 153.93 on Friday. This pullback occurs within a sideways channel formation on the 60-minute chart.

Looking at the technical analysis, the 14-hour RSI has pulled back to avoid overbought conditions, but still has room left to run before reaching oversold levels. The bears will likely target 153.28 or lower, down to 152.59, while bulls will look for rebounds at about 154.58 or higher, up to 155.26.

From a fundamental perspective, the USD/JPY pair trades during a relatively busy period in both markets. In Japan, the gross domestic product for Q2 matched the (QoQ) forecast of 0.4%, with an annualized GDP of 1.4% and a gross domestic product deflator of 2.6%. Japanese labor cash earnings for July outperformed expectations at 4.7%, while the non-seasonally adjusted current account balance exceeded forecasts.

In the US, the producer price index for August matched the forecast (MoM) change of 0.4%, but beat expectations in its year-over-year equivalent with a change of 5.4%. The US initial jobless claims for last week came in slightly worse than expected at 206k versus a forecast of 205k.