USD/JPY dives after weak US labor market data
|The USDJPY pair dropped more than half a percent on Friday, undermined by the disastrous labor market data from the US.
Market participants were shocked today as the non-farm payrolls number fell short of expectations massively, posting only 266,000 new jobs in April. The consensus had expected circa one million new jobs.
The miss was a 3.7 sigma miss to expectations and the second biggest miss in history.
Commenting on the data, Bloomberg notes that the payroll data was "literally shocking" with the headline job growth of just 266k, an unemployment rate of 6.1%, and earnings growth of 0.7%," all speaking to a lack of low-skilled job additions." The figure was particularly weak given the revisions of -78k over the past couple of months.
The fragile numbers led to a large decline in US yields, with the 10-year yield falling below 1.5% before retracing the entire move.
The USDJPY pair stopped at the crucial support of 108.30 before bouncing higher. If the pair drop below that level, the medium-term outlook could change to bearish. However, if the greenback defends the 108.30 level, the bulls still have a chance, especially if US yields continue in their reversal.
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.