- USD/JPY rebounds swiftly from 146.00 amid weakness in the Japanese Yen due to uncertainty about BoJ’s exit from the ultra-loose policy.
- The US Dollar retreats ahead of the US ADP Employment Change data.
- Employees in the US seem reluctant to switch jobs as the labor market is not as hot as it was earlier.
The USD/JPY pair discovered buying interest after dropping below the 146.00 support on Wednesday. The asset demonstrated recovery despite weakness in the US Dollar ahead of the United States Automatic Data Processing (ADP) Employment Change data for August.
S&P500 futures remain sideways amid a quiet market mood as investors await the US private employment data. US equities were significantly bought on Tuesday after weaker than anticipated Job Openings data, which elevated Federal Reserve (Fed) soft landing hopes. Softer labor demand indicates that the job market is losing its resilience.
Fewer demand for labor by US firms was also the outcome of lower resignations by workers. Employees seem reluctant to switch jobs as the labor market is not as hot as it was earlier. For more information about the current status of the US labor market, ADP Employment data will be keenly watched.
As per the projections, fresh private payrolls were 195K in August vs. July’s reading of 324K. Investors should note that the economic data has been outperforming consensus for past four months. Higher-than-expected payroll data could allow the Fed to keep discussions about one more interest-rate hike alive.
Meanwhile, weakness in the Japanese Yen remains persistent as the Bank of Japan (BoJ) is not expected to exit from dovish monetary policy sooner. BoJ board member Naoki Tamura said it will take a bit more time to judge whether Japan meets BoJ’s price target in a sustainable manner. Also, in what order and at what pace BoJ exits easy policy will depend on economic conditions at the time.
Japanese authority in its annual economic white paper said that "Japan has seen price and wage rises broaden since the spring of 2022,” adding that “such changes suggest the economy is reaching a turning point in its 25-year battle with deflation.”
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 drops below 1.0500 after US PMI data
EUR/USD stays under bearish pressure and trades below 1.0500 on Monday. The upbeat ISM Manufacturing PMI data for November provides an additional boost to the US Dollar, forcing the pair to extend its slide in the American session.
GBP/USD slumps below 1.2650 on broad USD strength
Following a consolidation phase in the early European session, GBP/USD turns south and trades below 1.2650 on Monday. The pickup in the safe-haven demand for the US Dollar, in addition to the better-than-forecast US Manufacturing PMI data, weighs on the pair.
Gold stays below $2,650 as US yields push higher
Gold starts the new week on the back foot and trades below $2,650. The renewed US Dollar strength and the recovery seen in the US Treasury bond yields don't allow the pair to stage a rebound despite the risk-averse market atmosphere.
The week ahead: Payrolls take centre stage, as French government poised to collapse
At the start of this week, the focus is likely to be on France. On Sunday, Marine Le Pen said that her party’s talks with the government led by Michel Barnier, had broken down, which paves the way for a no-confidence vote in the technocratic government that has no majority in Parliament.
Trump warns BRICS over Dollar rival plans
Donald Trump, the incoming U.S. President, has issued a strong warning to BRICS nations over their plans to challenge the dominance of the U.S. dollar in global trade.
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.