Japanese Yen stalls amid soft JOLTS data

USD/JPY trades on the back foot near the 157.40 area during Tuesday's American session as the Japanese Yen (JPY) builds on the gains secured over the past week. Softer United States (US) labor demand data has taken the edge off the US Dollar (USD), while lower energy prices offer an additional tailwind to the currency of a major net energy importer.

The Job Openings and Labor Turnover Survey showed vacancies fell to 7.359 million in June from a revised 7.537 million in May, undershooting the 7.4 million consensus and marking a further cooling in labor demand. The reading tempers the message from Monday's robust ISM Manufacturing Purchasing Managers Index and complicates the case for an additional Federal Reserve (Fed) rate increase, dragging US Treasury yields lower and narrowing the interest rate differential that has underpinned the pair for much of the year.

Al Arabiya reports that an announcement regarding the reopening of the Strait of Hormuz is expected, adding that communications are proceeding at full tilt and that progress has been made. Al Hadath, quoting a high-level source, indicated that arrangements for a full reopening could be announced within hours or on Wednesday.

Investors now look ahead to the Bank of Japan (BoJ) Monetary Policy Meeting Minutes, scheduled for release late in the Asian session. The document covers the June gathering and, therefore, predates both the suspected intervention and last week's hawkish hold, limiting its capacity to surprise.

Japan will also publish Labor Cash Earnings, forecast to accelerate to 3.4% YoY in June from 3.2%. With Governor Kazuo Ueda repeatedly framing the wage-price cycle as central to the policy outlook, a firm wage print would strengthen the hawkish case and could compound the pressure on USD/JPY.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 157.37, holding a bearish near-term bias as it remains well below the 20-period Simple Moving Average (SMA) at 158.52 and the 100-period SMA at 162.06. The pair is attempting to stabilize after the recent slide, while the Relative Strength Index (RSI) at 31 hovers just above oversold territory, hinting that downside momentum could be slowing but not yet reversing.

On the downside, immediate support is located at 157.23, ahead of lower floors at 156.62 and 156.30, which define the next bearish targets if selling resumes. On the topside, initial resistance comes at the horizontal barrier at 157.99, followed by the 20-period SMA at 158.52, with the 100-period SMA at 162.06 reinforcing a wider ceiling that would need to be reclaimed to ease the current bearish pressure.

(The technical analysis of this story was written with the help of an AI tool. Know more.)