USD/JPY falls sharply after US NFP data, trades around 109.70

After spending the first half of the day in a relatively tight range above 110.00, the USD/JPY pair came under strong bearish pressure and was last seen losing 0.52% on a daily basis at 109.70.

Weak NFP report hurts USD

The USD selloff following the US jobs report caused USD/JPY to turn south. The US Bureau of Labor Statistics reported on Friday that Nonfarm Payrolls in May increased by 559,000. This reading fell short of the market expectation of 650,000 and weighed on the greenback. On a positive note, the Unemployment Rate declined to 5.8% from 6.1% but investors paid little to no attention to this print.

Commenting on the data, "the dollar's falls could be limited by the wait toward next Thursday's Consumer Price Index publication," said FXStreet analyst Yohay Elam. "It comes after the Fed entered its blackout period, which means the bank does not have the ability to dismiss elevated prices as transitory." 

NFP Quick Analysis: Dollar buying opportunity? Two reasons why dollar downing is likely temporary.

Following this report, the US Dollar Index lost its traction and was last seen losing 0.4% on the day at 90.15. Later in the session, Factory Orders data for April will be featured in the US economic docket.

Meanwhile, the 10-year US Treasury bond yield, which gained as much as 1% earlier in the day, is currently losing 1.4% at 1.6%, putting additional weight on USD/JPY's shoulders.

Technical levels to watch for