Japanese Yen steadies against US Dollar after strong NFP report

The Japanese Yen steadied against the US Dollar on Friday after a strong Nonfarm Payrolls (NFP) report was released by the Bureau of Labor Statistics (BLS). The USD/JPY pair remained virtually unchanged at around 155.85, despite the US Dollar's positive reaction to the unexpectedly robust employment data. The Japanese Yen retained its support from expectations of monetary tightening in Japan.

In August, the US NFP increased by 162K, exceeding market expectations for a 56K increase. The Unemployment Rate remained at 4.1%, and the Labor Force Participation Rate rose to 61.6%, both as anticipated. The Annual Average Hourly Earnings growth slightly eased to 3.1% from 3.2% in July. The positive surprise in job creation provided immediate support to the US Dollar, but the Japanese Yen's strength mitigated the Greenback's positive impact.

The Bank of Japan's hawkish stance and suspected intervention further bolstered the Yen. Meanwhile, the US Dollar consolidated its previous day's losses due to soft bond yields, while traders eagerly awaited the NFP report. The Australian Dollar (AUD) held steady above 0.7200, nearing its highest level since mid-May, awaiting further cues from the US NFP report.

Meanwhile, the decline in US bond yields kept the US Dollar depressed near its lowest level in over a week, benefiting the Australian Dollar amid the Reserve Bank of Australia's hawkish outlook. Gold (XAU/USD) experienced a sharp decline on Friday, ending a two-day recovery after the US NFP report surpassed expectations.