- US dollar strengthens after a better-than-expected NFP.
- USD/JPY erases weekly losses with the latest rally.
The USD/JPY jumped from 114.90 to 115.38 following the release of the US employment report that showed better-than-expected numbers. The pair hit the highest level since Monday and it is holding above 115.00, with the bullish momentum intact.
After the ADP report and other labor indicators, the 150K increase in payrolls faced downside risk. The numbers came in the other way with a positive surprise. The number below consensus was the unemployment rate, which rose from 3.9% to 4%, but it was due to an increase in the labor participation from 61.9% to 62.2%.
“The Omicron wave has depressed economic activity, and this was meant to translate into weak hiring. It hasn't. 467k jobs created and massive upward revisions suggest a fundamentally very strong economy. With companies desperate to hire and the biggest issue being the lack of suitable staff, wages are rising sharply, and the Fed will respond”, says analysts from ING.
The numbers triggered a rally of the US dollar across the board and a sharp increase in US yields that weakened the Japanese yen. The US 10-year yield climbed to 1.91%, the highest since January 2020 and the 30-year reach 2.20%.
The post NFP rally put the USD/JPY on its way to the second daily gain in a row. The next resistance could be seen at 115.45, before last week highs at 115.65/70. Now the 115.00 zone has become the immediate support, followed by 114.78.
Technical levels
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 stays near 1.0400 in thin holiday trading
EUR/USD trades with mild losses near 1.0400 on Tuesday. The expectation that the US Federal Reserve will deliver fewer rate cuts in 2025 provides some support for the US Dollar. Trading volumes are likely to remain low heading into the Christmas break.
GBP/USD struggles to find direction, holds steady near 1.2550
GBP/USD consolidates in a range at around 1.2550 on Tuesday after closing in negative territory on Monday. The US Dollar preserves its strength and makes it difficult for the pair to gain traction as trading conditions thin out on Christmas Eve.
Gold holds above $2,600, bulls non-committed on hawkish Fed outlook
Gold trades in a narrow channel above $2,600 on Tuesday, albeit lacking strong follow-through buying. Geopolitical tensions and trade war fears lend support to the safe-haven XAU/USD, while the Fed’s hawkish shift acts as a tailwind for the USD and caps the precious metal.
IRS says crypto staking should be taxed in response to lawsuit
In a filing on Monday, the US International Revenue Service stated that the rewards gotten from staking cryptocurrencies should be taxed, responding to a lawsuit from couple Joshua and Jessica Jarrett.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
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.