- USD/JPY climbs over 0.90% to 148.05 after strong US jobs report and higher Treasury yields.
- January's 353K job additions lessen Fed rate cut forecasts, indicating a tighter labor market.
- Rises in US 10-year Treasury yield and Dollar Index signal robust confidence in the US economy.
- Anticipation of BoJ ending negative rates complicates USD/JPY outlook, eyes on March meeting.
The USD/JPY bounces from around the 146.00 handle and prints a new three-day high at 148.05 after a strong US Nonfarm Payrolls report pushed aside Federal Reserve’s rate cut speculations amongst the investment community. At the time of writing, the major exchanges hands at 147.77, gains more than 0.90%.
USD/JPY leaps as strong employment figures reinforce US Dollar strength, eyes on BoJ's next move
US Nonfarm Payrolls data was outstanding, with the economy creating 353K new jobs, crushing forecasts of 180K, and above December’s numbers upward revised from 216K to 333K. The Unemployment Rate was flat compared to last month's data at 3.7%, while Average Hourly Earnings (AHE) rose. Monthly AHE came at 0.6%, up from 0.4%, and year-over-year clocked 4.5%, up from 4.4%.
Following the report, the US 10-year Treasury note yield, which closely correlates with the USD/JPY pair, soared from around 3.90% to 4% and gained more than ten basis points (bps). The US Dollar Index (DXY), which tracks the buck´s value versus a basket of peers, advances 0.67%, up at 103.76, after dipping to a low of 102.90.
Meanwhile, a hawkish tilt by the Bank of Japan (BoJ) has increased the odds for Governor Kazuo Ueda and Co. to end the negative interest rates cycle. Analysts at Société Générale said, “The yen snapped back from a challenging January after the hawkish read of the BoJ Summary of Opinions at the January meeting. Our base case is for a rate increase and an end to YCC in March. Demand picked up for 3-month downside strikes in USD/JPY.”
Looking forward in the schedule, the US economic calendar is set to include the release of the University of Michigan Consumer Sentiment as well as Factory Orders.
USD/JPY Technical Levels
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 continues to lose ground amid firmer US Dollar
The AUD/USD continues its losing streak, trading around 0.6580 on Thursday following the Reserve Bank of Australia's less hawkish stance, especially after last week's inflation data exceeded predictions. Nevertheless, the RBA acknowledged that recent progress in controlling inflation has stalled, maintaining its stance of keeping options open.
USD/JPY holds positive ground above 155.50 following the BoJ Summary of Opinions
The USD/JPY pair trades in positive territory for the fourth consecutive day around 155.60 during the early Asian trading hours on Thursday. However, the fear of further intervention from the Bank of Japan is likely to cap the downside of the Japanese Yen for the time being.
Gold price drops amid higher US yields awaiting next week's US inflation
Gold remained at familiar levels on Wednesday, trading near $2,312 amid rising US Treasury yields and a strong US dollar. Traders await unemployment claims on Thursday, followed by Friday's University of Michigan Consumer Sentiment survey.
President Biden threatens crypto with possible veto of Bitcoin custody among trusted custodians
Joe Biden could veto legislation that would allow regulated financial institutions to custody Bitcoin and crypto. Biden administration’s stance would disrupt US SEC’s work to protect crypto market investors and efforts to safeguard broader financial system.
US inflation data in the market purview
With next week's pivotal US inflation data looming, we're witnessing a stall in stock market momentum and an uptick in US Treasury yields. This shift comes amid murmurs of hawkish sentiment from Fed speak. Indeed the mind games intensify even further as investors cling to their rate cut hopes.