May US industrial production rose 0.1% month-over-month, below the 0.3% estimate, weighing on the dollar ahead of the BoJ rate decision.
The USD/JPY pair edged lower after US industrial production grew just 0.1% in May, falling short of the 0.3% consensus and slowing from April’s 0.9% gain. The weaker-than-expected data signaled softer industrial momentum, aligning with the downbeat NY Empire State Index for June, which dropped to 5.7 from 19.6 in May.
Markets are now focused on the Bank of Japan’s upcoming rate decision, with expectations for a hike from 0.75% to 1.00%—Japan’s highest rate in decades. The yen’s strength remains contingent on the BoJ’s move, while the dollar’s near-term support is limited by the disappointing US data.
Technically, USD/JPY trades at 160.07, sandwiched between key moving averages. The RSI at 45 suggests consolidation rather than a clear directional break, with initial support at 160.03 and resistance near 160.29.