USD/JPY Continues to Fall After US Retail Sales Miss
•February 10, 2026
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Why It Matters
The move underscores yen strength amid Japanese political stability and deteriorating U.S. macro data, shaping FX risk‑on/off dynamics and influencing global investors’ currency allocations.
Key Takeaways
- •Yen gains as Japanese equities rally
- •USD/JPY breaks 100‑day moving average
- •US retail sales miss fuels dollar weakness
- •Upcoming payrolls and CPI could shift Fed stance
- •Technical target near 152.27 if downtrend continues
Pulse Analysis
The Liberal Democratic Party’s victory in the lower‑house election, delivering a two‑thirds majority for Prime Minister Fumio Takaichi, has injected fresh confidence into Japan’s equity markets. The Nikkei index surged roughly 7 % over two sessions as investors anticipate a more decisive fiscal agenda and potential structural reforms. That optimism translated into a rapid rotation from the U.S. dollar into the yen, pushing USD/JPY lower for a second consecutive day. Analysts view the political win as a catalyst that could sustain yen appreciation, especially if the government follows through on stimulus promises. At the same time, the United States is grappling with a string of soft macro indicators that have eroded dollar momentum. Yesterday’s retail‑sales report fell short of expectations, and a series of secondary employment figures showed disappointing trends. Traders are now eyeing the December non‑farm payrolls, where consensus forecasts a modest 70 K increase—far below the market’s recent optimism. An early look at the Atlanta Fed’s GDPNow model suggests Q4 growth may settle just under 4 %, reinforcing the narrative of a slowing economy. Together, these data points keep pressure on the greenback and support yen gains. From a technical standpoint, USD/JPY has slipped through its 100‑day moving average and now eyes the 150.39 level of the 200‑day average, with the next resistance near the January low of 152.27. Should the pair breach that threshold, further downside could be triggered by Friday’s CPI release and any dovish tone from the Federal Reserve. Market participants therefore monitor both Japanese policy cues and U.S. inflation data to gauge the yen’s trajectory. The convergence of political stability in Japan and weakening U.S. fundamentals creates a compelling case for continued yen strength in the near term.
USD/JPY continues to fall after US retail sales miss
USD/JPY Down Heavily for Second Straight Day After Takaichi’s Election Win
USD/JPY is down heavily for the second straight day following Takaichi's election win. The two‑thirds majority in the lower House gives her wide latitude to govern and has led to a flood of money into Japanese equities. The Nikkei is up 7 % in two trading days and USD/JPY reflects some of that enthusiasm as money flows out of dollars and into yen.
Japan faces a debt problem but a strong government gives Takaichi stability and the ability to structurally reform the economy where necessary, including making unpopular moves. She had campaigned on more stimulus though, so the market will be carefully watching for actual policies.
Yesterday's drop in the pair was more driven by broad USD selling but today the yen is a standout performer. EUR/JPY and GBP/JPY are both down more than 1 % and the yen is the top G10 performer.
Still, there are worries about the US dollar in light of recent data. A series of secondary jobs numbers last week were soft and today's US retail sales report was weak. Tomorrow we get the December non‑farm payrolls report and the consensus is +70 K. That sounds rich in light of weak ISM services employment and a sharp drop in job openings in the JOLTS report.
Later today, we will get an update from the Atlanta Fed GDPNow tracker and it's likely to show that Q4 GDP is on pace for a sub‑4 % reading. That high‑3s is still good but it shows the direction of change for a quarter that had some predicting a +5 % reading.
In terms of the chart, USD/JPY is now through the 100‑day moving average and could target the January low of 152.27. The 200‑day moving average is at 150.39 beyond that.
USD/JPY daily
Beyond the jobs report, eyes will be on Friday's CPI report and the possibility the FOMC could have more leeway to cut rates.
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