USD/JPY stays calm near 108.50, remains on track to post weekly gains
- US Dollar Index stays above 100.50 in American session.
- Wall Street's main indexes suffer heavy losses on Friday.
- US data showed NFP posted largest monthly decline in 11 years.
After climbing to 108.50 during the European trading hours, the USD/JPY pair struggled to make a decisive move in either direction and continues to move sideways near that level as risk aversion helps JPY stay resilient against the USD. As of writing, the pair was up 0.55% on the day at 108.49. On a weekly basis, the pair is up 80 pips.
Mixed reaction to key US data
The US Bureau of Labor Statistics on Friday reported that Nonfarm Payrolls in March declined by 701,000 and noted that the data was not reflecting the full impact of the coronavirus outbreak on jobs as it was collected before shutdowns. Moreover, the Unemployment Rate rose to 4.4% from 3.5% and the Labor Force Participation Rate dropped to 62.7% from 63.4%.
Commenting on the NFP report, “the pandemic already had a worse impact on the labour market than anyone anticipated. The dislocations are expected to peak in May, assuming the pandemic is under control by then,” said Sal Guatieri from BMO Capital Markets.
However, the ISM's Non-Manufacturing PMI surprisingly stayed above 50 in March and revealed that the economic activity in the service sector continued to expand.
Markets largely ignored these figures and the US Dollar Index didn't have a difficult time staying in the upper half of its weekly range above the 100.50 mark.
However, Wall Street's main indexes remained on the back foot and now look to end the session around 2% lower to reflect the risk-off atmosphere, which helps the JPY limits its losses against its rivals.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
