- USD/JPY struggled to preserve modest intraday gains to the weekly high amid some USD selling.
- The mixed US monthly jobs report did little to impress the USD bulls or provide any impetus.
- The Fed-BoJ policy divergence continued lending support to the pair and helped limit losses.
The USD/JPY pair surrendered its modest intraday gains to the weekly high and eased back closer to the daily low, around the 130.15 region, in reaction to the mixed US monthly jobs report.
The headline NFP print showed that the US economy added 428K new jobs in April as compared to the 391K anticipated. However, the higher-than-expected reading was offset by a slight downward revision of March's reading to 428K from the 431K reported previously. Moreover, the unemployment rate missed consensus estimates and held steady at 3.6% during the reported month.
The report further revealed that Average Hourly Earnings rose 0.3% MoM in April and 5.5% YoY as against 0.4% and 5.5% expected, respectively. The data forced the US dollar to extend its modest pullback from a two-decade high. Apart from this, a weaker risk tone benefitted the safe-haven Japanese yen and acted as a headwind for the USD/JPY pair.
That said, a big divergence in the monetary policy adopted by the Fed and the Bank of Japan helped limit any deeper losses, at least for the time being. The markets seem convinced that the Fed would need to take more drastic action to bring inflation under control and are still pricing in a further 200 bps rate hike for the rest of 2022.
This, in turn, remained supportive of elevated US Treasury bond yields, which supports prospects for the emergence of some USD dip-buying. In contrast, the BoJ has promised to conduct unlimited bond purchases to defend its “near-zero” target for 10-year yields and vowed to keep its existing ultra-loose policy settings.
The fundamental backdrop suggests that any meaningful pullback might still be seen as a buying opportunity and likely remain limited. Nevertheless, the USD/JPY pair is still on track to post gains for the ninth successive week and the highest weekly close since April 2002.
Technical levels to watch
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD faces formidable resistance around 0.6600
AUD/USD resumed its weekly pullback on Thursday, this time accelerating its losses to the 0.6450 region on the back of the stronger US Dollar, while disheartening prints from the Australian labour market also contributed to the sour mood around the Aussie.
EUR/USD: Losses could pick up pace below 1.1470
EUR/USD remained on the back foot and slipped back to fresh multi-week lows near 1.1550 on Thursday, always in response to the improved sentiment surrounding the Greenback, which in turn extended its upside momentum on the back of firmer data from key fundamentals.
Gold trades with modest losses near $3,340
Gold remains in auto-pilot around the $3,340 zone per troy ounce as the NA session draws to a close on Thursday. The yellow metal's negative trend stems from the extra improvement in the dollar, rising US yields, and some relief from trade concerns.
XRP price just 5% from record high as Ripple eyes Dubai's tokenized real estate market
Ripple's (XRP) uptrend paces toward new all-time highs, but is trading at around $3.25 on Thursday, after a remarkable recovery from a support level tested at $2.80 on Tuesday.
China’s first-half growth remains on track, though activity data signals caution
China's second-quarter GDP beat forecasts again with a 5.2% year-on-year growth, driven by strong trade and industrial production. Yet sharper-than-expected slowdowns in fixed-asset investment and retail sales and falling property prices are a concern.
Best Brokers for EUR/USD Trading
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.