USD/JPY wavers around 156.70 with all eyes on US employment data

USD/JPY consolidates around 156.50 ahead of US employment data.
The US ADP is expected to show a 47,000 net increase in employment in December.
Growing tensions between Japan and China have provided support to the safe-haven yen on Wednesday.

Guillermo Alcala FXStreet

The Japanese Yen remains trading within a tight range against the US Dollar on Wednesday. The pair moves without a clear bias, both sides of the 156.50 line, with traders looking from the sidelines ahead of the release of key US employment figures later on the day.

The market, however, remains calm ahead of the release of the US ADP Employment Change, which is expected to show that the US economy created 47,000 jobs in December, to offset the 32,000 net losses seen in November.

Later on, the US Bureau of Labor Statistics (BLS) will release November’s JOLTS Job Openings, which are expected to have ticked down to 7.6 million from October’s 7.67 million. These figures will set the tone for Friday’s Nonfarm Payrolls report, and might provide some boost to USD volatility later on Wednesday.

On Tuesday, rising tensions between China and Japan escalated, as Beijing announced a ban on exports of dual-use goods to Japan that might be used for military purposes, in retaliation for Prime Minister Takaichi’s comments about Taiwan. This, coupled with Bank of Japan (BoJ) Governor Ueda’s comments reiterating the bank's commitment to keep hiking rates, has provided some support to the Yen.

The Greenback lost ground earlier in the week, as weaker-than-expected US ISM Manufacturing PMI figures and some dovish-leaning comments by Minneapolis Fed President Neel Kashkari endorsed the market’s view that the Fed might be forced to cut rates more than once in 2026.

Economic Indicator

ADP Employment Change

The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Why it matters to traders?

Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.

Economic Indicator

JOLTS Job Openings

JOLTS Job Openings is a survey done by the US Bureau of Labor Statistics to help measure job vacancies. It collects data from employers including retailers, manufacturers and different offices each month.

EUR/USD eases to four-week lows near 1.1650

EUR/USD now loses further momentum and recedes to multi-week lows near 1.1650 on Thursday. The pair’s extra retracement comes on the back of the persistent bid tone in the US Dollar as investors continue to gear up for the release of the December NFP figures on Friday.

GBP/USD: Further weakness could challenge 1.3400

GBP/USD remains under unabated selling pressure on Thursday, slipping to fresh three-day lows around 1.3415 in response to further improvement in the sentiment surrounding the Greenback ahead of Friday’s key NFP data.

Gold trims losses, back to around $4,450

Gold now manages to regain some balance, fading its earlier pullback to the proximity of the $4,400 region per troy ounce and reshifting its attention to the $4,450 zone on Thursday. The yellow metal’s move lower comes in response to a better tone in the Greenback and the generalised recovery in US Treasury yields.

Pi Network flashes bearish potential as selling pressure mounts

Pi Network trades above $0.2000 at press time on Thursday, following a nearly 2% decline the previous day. Centralized Exchanges have received 1.90 million PI tokens over the last 24 hours, suggesting risk-off sentiment among holders. The technical outlook for the PI token remains bearish, with a risk of a cross below the 20-day Exponential Moving Average.

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