The slowdown in service activity caused by a decline in business activity (53.9 vs. 59.9) and the first drop in employment in four months (45.2 vs. 51.8). The price index has risen to 70.7 (the highest level since October 2022) – reflecting difficulties in logistics from the Middle East and rising fuel prices.

Investors are also awaiting the release of an important report on the Consumer Price Index (CPI) and the minutes from the last FOMC meeting this week. Pro-inflation forecasts have strengthened due to a strong employment report released on Friday, which threatens a tough response from the Fed. Markets have largely priced in that the Fed's key interest rate will remain unchanged until the end of this year.

This week, the USD/JPY pair is approaching a significant level of 160 yen per dollar again, as oil prices show no signs of decreasing, with Brent quotes trading around $110/barrel at the beginning of the week. Investors are not rushing to act in the currency market as all attention is focused on the latest deadline set by the US president for the opening of the Strait of Hormuz. Japan, as one of the key importers of oil from the Persian Gulf countries, is currently suffering from fuel supply shortages.

Traders are watching for signs of Tokyo's intervention in the currency market as the weakening yen is close to a significant threshold of 160-162 yen per dollar. At the end of last week, Japan's Finance Minister, Shunichi Suzuki, warned currency traders that the government is ready to take measures against speculative movements in the currency markets as volatility has significantly increased. It is worth noting that Japan last intervened in the currency markets in July 2024. At that time, the USD/JPY pair fell by 9.5% from 161.7 over 4 weeks to 145.5.

On Tuesday, the services PMI indexes for March will be released in Germany and the eurozone. From the US, we expect data on durable goods orders. The EIA will also publish the Short-Term Energy Outlook.

On the weekly chart of USD/JPY, it can be seen that the yen is in a stable weakening trend since May 2025. The nearest resistance level is marked around 161-162 yen, while support is at 155.0.