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USD/JPY declines as Yen strengthens after election win, overshadowing US jobs data

  • The US Dollar rose briefly after stronger-than-expected job creation but gave back gains against a firm Japanese Yen.
  • The Unemployment Rate falls to 4.3% and wages accelerate, reinforcing expectations of a prolonged Fed pause.
  • Sanae Takaichi’s election victory fuels demand for the Japanese Yen, pushing USD/JPY down for the day.

USD/JPY trades around 153.30 on Thursday at the time of writing, down 0.70% on the day, after briefly advancing following the release of a stronger-than-expected US jobs report. The US Dollar (USD) initially benefited from robust Nonfarm Payrolls (NFP) data before the pair quickly resumed its decline, pressured by a particularly firm Japanese Yen (JPY).

The Bureau of Labor Statistics (BLS) reports that Nonfarm Payrolls increased by 130,000 in January, above the 70,000 expected by the market and following a downwardly revised 48,000 gain in December. The Unemployment Rate edged lower to 4.3% from 4.4%, while the Labor Force Participation Rate rose to 62.5%. Average Hourly Earnings climbed 0.4% on a monthly basis and held steady at 3.7% YoY, exceeding expectations of 3.6%.

These figures support the view that the Federal Reserve (Fed) can keep interest rates within the current 3.50%-3.75% range at its upcoming meetings. According to the CME FedWatch tool, markets now almost fully price in a pause in March and April, which initially underpinned the Greenback.

However, the bullish impact of the employment report proves short-lived for USD/JPY. Investors also focus on significant downward revisions to previous data, including an 898,000 reduction in the March 2025 employment level as part of the annual benchmark revision, and a cut to total 2025 job growth to 181,000 from 584,000 previously estimated. These adjustments highlight a weaker underlying hiring trend last year, tempering the initial optimism.

At the same time, the Japanese Yen (JPY) draws strong support following Prime Minister Sanae Takaichi’s decisive victory in Sunday’s elections. Markets anticipate that a strengthened mandate could facilitate the implementation of pro-growth measures and provide the Bank of Japan (BoJ) with greater room to adjust its monetary policy gradually. Speculation about potential tightening in the medium term boosts demand for the Japanese currency.

In this context, despite a stronger-than-expected US jobs report, USD/JPY fails to hold onto its gains and resumes its downward move, reflecting a market balance currently tilted in favor of the Japanese Yen.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHF
USD0.31%-0.04%-0.58%0.38%-0.45%0.03%0.62%
EUR-0.31%-0.35%-0.93%0.07%-0.76%-0.29%0.31%
GBP0.04%0.35%-0.59%0.42%-0.41%0.06%0.65%
JPY0.58%0.93%0.59%0.99%0.15%0.63%1.23%
CAD-0.38%-0.07%-0.42%-0.99%-0.83%-0.36%0.24%
AUD0.45%0.76%0.41%-0.15%0.83%0.47%1.07%
NZD-0.03%0.29%-0.06%-0.63%0.36%-0.47%0.58%
CHF-0.62%-0.31%-0.65%-1.23%-0.24%-1.07%-0.58%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Ghiles Guezout

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

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