- The USD/JPY fell to it lowest point since June 23, recording more than 1% losses on the day.
- NFP report showed that the US added 209K jobs in June vs 225K expected.
- Wage inflation to maintain hawkish bets on the Fed steady.
On Friday, the USD/JPY plunged towards the 142.15 area, a two-week low, and is poised to record a weekly gain after three consecutive weeks of losses. In that sense, the USD faced severe selling pressure after Nonfarm Payrolls came in lower than expected. However, wage inflation still remains sticky.
The recent release by the US Bureau of Labor Statistics indicated that the Nonfarm Payrolls for June fell below expectations. The report reveals that the US economy added 209K jobs in June, which was lower than the anticipated 225K and decreased from the previous figure of 306K. Additionally, wage growth remained positive, with a monthly increase of 0.4%, surpassing the expected 0.3%. The Unemployment rate stood at 3.6%.
As a result of these fIgures, there was a widespread decline in US Treasury yields. The 2-year yield experienced a significant drop of over 1.70%, settling at 4.90%. Similarly, the 5-year and 10-year yield rates reached 4.29% and 4.02%, respectively. It’s worth noticing that Jerome Powell has mentioned the possibility of further tightening due to a tight labor market and warned it can see some “pain”. In addition, while wage inflation remains sticky, the Fed will be pressured to continue tightening or keeping rates high until progress to the downside is seen.
Meanwhile, based on the CME FedWatch Tool, investors are fully factoring in a 25 basis points increase in the upcoming July meeting of the Fed. If this occurs, it will raise the rates within the range of 5.25% to 5.50%, and an additional 25 bps hike by December is nearly 40% priced in.
All eyes are now on the forthcoming release of the Consumer Price Index (CPI) data for June from the US, next Wednesday, as it will continue to shape the expectations regarding the upcoming decision by the Federal Reserve on July 26.
USD/JPY Levels to watch
According to the daily chart, bulls took a big hit and the outlook is starting to favor the JPY. The Relative Strength Index (RSI) has plunged towards 50.00 and the Moving Average Convergence Divergence (MACD) has printed a red bar, indicating that the bears are taking the lead. In addition, the bulls have failed to defend the 20-day Simple Moving Average (SMA), a key support for the pair.
In case of further downside, support levels are seen at 142.00, followed by the 141.40 area and the 140.35 zone. On the upside, the mentioned 20-day SMA stands as the nearest resistance at 142.75, followed by the 143.00 area and 143.60.
USD/JPY Daily chart
-638243478257549391.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.