In response to the poor NFP report, the USD/JPY duo dropped to new daily lows, albeit it immediately rebounded a few percentage points. Last observed trading in the 111.8 area, the duo was up almost 0.20 percent on the day. This week’s final trading day saw a little uptick in great sentiment, with the duo climbing to more than one-week highs, although the upward trend was met with resistance around the 112.00 round-figure barrier. In early North American trading, the intraday retracement decline gained momentum amid strong Greenback dumping following the publication of the carefully watched monthly employment report from the United States.
In response to the main Nonfarm Payrolls report, which revealed that the US economy added only 194K new jobs in September, compared to expectations of 500K, the Dollar fell across the spectrum. This was partially offset by an upward adjustment of the previous month’s reading, which was raised to 366K from the previously reported figure of 235K. Furthermore, the unemployment rate fell below 5% for the first time since March 2020, marking a historic low.
Indications Of Fed Taper Helped Limit USD And Pairing Deficits
The dismal employment data, on the other hand, did little to undermine market sentiment that the Federal Reserve would begin to reduce its bond purchases soon. The fact that the financial markets reacted in a rather restrained manner demonstrated this. Even though interest rates were near four-month highs, the yield on the benchmark 10-year US bond fund persisted. As a result, the USD’s declines were limited, and the USD/JPY pair received some more support.
Despite this, the underlying situation continues to be favorable to optimistic traders, and the development of some dip-buying lends further weight to the bullish view of the market. While this is the case, it will still be smart to wait for a sustained move over the 112.00 mark, which would represent the highest level seen since February 2020, before speculators begin preparing for any additional strengthening advance.
Outline of the Technical and Fundamental Details
USD/JPY CHART. Source: Tradingview.com
Today’s closing price was 111.75, today’s daily change is 0.12 percent, today’s daily change is 0.11 percent, and today’s daily open is 111.63 percent.
A mix of variables helped the USD/JPY pair build on Thursday’s gains and gain traction again on Friday. It was a tough day for the relatively secure Japanese Yen, which was further weakened by the widening US-Japanese government bond yield difference. A probable arrangement to avoid a US government debt collapse prompted a typical risk-on rally in the stock markets.
By a 50-48 vote, the Senate raised the debt limit to December 1. Meanwhile, US Treasury bond yields have rallied strongly since late September, when the Fed announced it would start to decrease its bond holdings by the end of 2021. However, the Bank of Japan’s yield curve management program kept the 10-year Japanese government bond yield near zero.