USD/JPY rebound prods 139.00 amid steady yields, cautious mood ahead of US NFP


  • USD/JPY snaps four-day downtrend with mild gains at weekly low.
  • Market’s consolidation ahead of US NFP, lack of major data/events elsewhere allows Yen pair bears to take a breather.
  • Receding hawkish Fed bets highlight today’s US jobs report, downbeat statistics can please Yen buyers.

USD/JPY pares weekly losses around 138.85-90 during early Friday’s boring session as traders await the US jobs report amid a light calendar in Japan. Adding strength to the market’s inaction could be the mixed feelings about the US Federal Reserve (Fed) and the Bank of Japan (BoJ) of late, as well as the inactive bond market by the press time.

That said, the US 10-year Treasury bond yields prints the first daily gain in six as it bounces off a two-week low to 3.61% by the press time whereas the two-year counterpart steadies near the weekly bottom surrounding 4.35% following a three-day downtrend. It should be noted that the S&P500 Futures remain mildly positive despite the upbeat performance of Wall Street.

On the other hand, the US Dollar weakness is the biggest catalyst to favor the Yen buyers. That said, US Dollar Index (DXY) seesaws around 103.56 by the press time, after falling the most in a month while reversing from the highest levels since mid-March the previous day.

If we trace the main culprits for the USD’s fall, the market’s pricing of the Fed rate hike and cautious optimism about China, as well as the US debt ceiling agreement seem to gain major attention. It should be noted that interest rate futures suggest the market’s pricing of the Federal Reserve (Fed) rate hike dropped, from 17 basis points (bps) in June on Wednesday to 7 bps on Thursday. Behind the reduction in the hawkish Fed bets are the recently mixed US data and an absence of strong Fed talks.

Talking about the data, US ADP Employment Change eased to 278K in May from 291K prior (revised) but crossed the 170K market forecasts. On the same line, the weekly Initial Jobless Claims rose past 230K prior to 232K, versus 235K expected. Further, US ISM Manufacturing PMI eased to 46.9 in May compared to 47.0 anticipated and 47.1 previous readings whereas S&P Global Manufacturing PMI softened to 48.4 from 48.5 prior. Additionally, the US Employment Cost Index eased while the consumer sentiment gauge improved but the details were unimpressive.

Elsewhere, Federal Reserve Bank of St. Louis President James Bullard recently published an analysis wherein the Fed hawk accepts that the prospects for continued disinflation are good but not guaranteed, and continued vigilance is required.

At home, higher inflation numbers and Retail Trade data, published earlier in the week, pushes the Bank of Japan (BoJ) towards higher rates even if the International Monetary Fund’s (IMF) Chief Economist Pierre-Olivier Gourinchas said on Thursday, it is “too early for the Bank of Japan (BoJ) to tighten monetary policy as re-anchoring inflation expectations to its 2% target will take time.

Moving on, monthly US employment clues and the last round of the Fed talks ahead of the pre-Federal Open Market Committee (FOMC) blackout period for policymakers will be eyed closely for clear directions. Forecasts suggest the headline Nonfarm Payrolls (NFP) to ease to 190K from 253K prior while the Unemployment Rate is also expected to increase to 3.5% from 3.4%. It should be noted that the US Senate’s passage of the debt-ceiling bill and the avoidance of the default woes should also be eyed for a clear guide.

Technical analysis

Despite the latest rebound, the USD/JPY pair remains below the 10-DMA immediate hurdle of around 139.50, which in turn joins the bearish MACD signals and steady RSI (14) line to keep the pair sellers hopeful.

Additional important levels

Overview
Today last price 138.87
Today Daily Change 0.08
Today Daily Change % 0.06%
Today daily open 138.79
 
Trends
Daily SMA20 137.61
Daily SMA50 135.13
Daily SMA100 133.84
Daily SMA200 137.28
 
Levels
Previous Daily High 139.95
Previous Daily Low 138.43
Previous Weekly High 140.72
Previous Weekly Low 137.49
Previous Monthly High 140.93
Previous Monthly Low 133.5
Daily Fibonacci 38.2% 139.01
Daily Fibonacci 61.8% 139.37
Daily Pivot Point S1 138.16
Daily Pivot Point S2 137.54
Daily Pivot Point S3 136.64
Daily Pivot Point R1 139.69
Daily Pivot Point R2 140.58
Daily Pivot Point R3 141.21

 

 

Share: Feed news

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


Recommended content

Editors’ Picks

AUD/USD: Upside appears capped around 0.6800

AUD/USD: Upside appears capped around 0.6800

AUD/USD halted its multi-day recovery after faltering once again near the key 0.6800 mark on the back of a modest advance in the US Dollar and the bearish performance of the risk-linked galaxy.

AUD/USD News

EUR/USD keeps its constructive outlook in place so far

EUR/USD keeps its constructive outlook in place so far

EUR/USD printed new monthly highs north of 1.0900 the figure, although it met some renewed downside pressure on the back of the lacklustre recovery attempt in the Greenback ahead of key data releases on Tuesday.

EUR/USD News

Gold on its route to retest record highs at $2,450

Gold on its route to retest record highs at $2,450

Gold regains its traction and trades in positive territory slightly above $2,420 after dropping toward $2,400 at the beginning of the week. Investors await Fed Chairman Powell's appearance at the Economic Club of Washington.

Gold News

Ripple whales buy 300 million XRP in two days, altcoin holds steady above key support

Ripple whales buy 300 million XRP in two days, altcoin holds steady above key support

Ripple (XRP) noted the highest weekly gains in 2024 over the weekend as XRP holders celebrated the one-year anniversary of Judge Torres’ ruling in the SEC vs. Ripple lawsuit. XRP rallied to a peak of $0.5661 on Saturday, July 13. 

Read more

Failed assassination marks latest escalation in uncertainty

Failed assassination marks latest escalation in uncertainty

Following the shocking assassination attempt on former President Donald Trump, the nation is left wondering exactly why it happened as well as what may be coming next. There are already questions about whether the Secret Service, which answers to President Joe Biden, was incompetent or worse.

Read more

Forex MAJORS

Cryptocurrencies

Signatures