Japanese Yen gives back post-NFP gains despite US Dollar weakness
USD/JPY trades around 157.65 on Friday at the time of writing, down 0.28% on the day. The pair briefly dropped to 156.95 following the release of the United States (US) employment report before erasing the entire move and returning to pre-release levels.
On Friday, the Japanese Yen rebounded after a brief dip following the release of the US Nonfarm Payrolls (NFP) report. The USD/JPY pair regained losses, trading back to pre-release levels around 157.65, down 0.28% for the day. This recovery is primarily attributed to weakened Japanese Yen (JPY), while the US Dollar Index (DXY) remains near its daily lows.
The resilience in USD/JPY is particularly striking, given the muted response from the US economy to the NFP data. The US Bureau of Labor Statistics (BLS) reported a smaller-than-anticipated increase in Nonfarm Payrolls from 29K to 90K, with revisions to August and July also showing lower figures. The US job market appears to be cooling, with the Unemployment Rate rising to 4.2% and the Labor Force Participation Rate increasing to 61.8%.
Average Hourly Earnings also rose 3% year-over-year, below expectations of 3.2%. The US Dollar Index fell 0.23% after the data and remains close to its daily lows. The simultaneous movement in USD/JPY suggests that the pair's recovery is driven more by selling of the Japanese Yen than renewed demand for the US Dollar. The employment figures may alter expectations for the Federal Reserve's next monetary policy decision, with the CME FedWatch tool now showing an 18% chance of a rate hike in October, down from 24% before the NFP release and 64% a week earlier.
Despite the cooling US labor market, the Japanese Yen's gains against the US Dollar are not sustained, as evidenced by the pair trading below key moving averages and resistance levels.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
