- USD/JPY touched its strongest level since March 2020.
- Pair seems to have gone into a consolidation phase following two-day rally.
- Nonfarm Payrolls in US is expected to rise by 700K in June.
The USD/JPY pair registered impressive gains in the second half of the week and climbed to its highest level since March 2020 at 111.66 on Friday before going into a consolidation phase. As of writing, the pair was down 0.1% on the day at 111.39.
DXY holds near multi-month highs
The broad-based USD strength provided a boost to USD/JPY on Wednesday and Thursday. Following Wednesday's upbeat ADP private-sector employment report, Thursday's data showed that the ISM Manufacturing PMI's Prices Paid component reached a new record high in June. The US Dollar Index (DXY) extended its weekly rally following these data and reached its highest level in nearly three months at 92.69 on Friday. As of writing, the DXY is posting small daily gains at 92.59.
Despite the USD's ongoing strength, the 1.3% decline witnessed in the benchmark 10-year US Treasury bond yield seems to be causing USD/JPY to stay in the negative territory.
Later in the day, the US Bureau of Labor Statistics will publish the labour market report for June. Nonfarm Payrolls (NFP) is expected to rise by 700,000 following May's increase of 559,000. Additionally, the Unemployment Rate is seen declining to 5.7% from 5.8%.
NFP Preview: Four reasons why June's jobs report could be a dollar downer.
Technical levels to watch for
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