USD/JPY surrenders early gains on disappointing NFP print, downside remains limited
| • The US economy added 155K new jobs in November; October figures were revised lower.
• Wage growth also falls short of market expectations and prompt some USD selling.
• Risk-on mood weighing on JPY’s safe-haven status and might help limit deeper losses.
The USD/JPY pair quickly surrendered daily gains to the 113.00 neighborhood and dropped to the lower end of its daily trading range in reaction to dismal NFP print.
The latest US monthly jobs report showed that the economy added 155K new jobs in November, a good 45K above market expectations and worse than the previous month's downwardly revised reading of 237K.
Adding to the disappointing headline number, average hourly earnings growth also fell short of market expectations and came in to show 0.2% m/m growth, with the yearly rate standing at 3.1%.
The data added to recent market concerns over a possible pause in the Fed rate hike cycle and prompted some fresh US Dollar selling, which was eventually seen as a key trigger behind the pair's sudden intraday slide.
Meanwhile, a goodish recovery in investors' appetite for riskier assets, as depicted by positive mood around equity markets, did little to boost the Japanese Yen's safe-haven status and might help limit deeper pull-back.
Technical outlook
Valeria Bednarik, FXStreet's own American Chief Analyst writes: “A strong reading enough to boost equities could push the pair up to the 113.60 price zone, while a disappointing one that spurs concerns could see it breaking through the 112.50/60 support area.”
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