USD/JPY Surges on Strong US Jobs Data, Eyes 145.50 Resistance
USD/JPY climbs higher as strong NFP data boosts the US Dollar
FUNDAMENTAL OVERVIEW:
The Japanese Yen (JPY) weakened against the US Dollar (USD) on Thursday after stronger-than-expected US Nonfarm Payrolls (NFP) data boosted the Greenback and highlighted the policy gap between the Federal Reserve (Fed) and the Bank of Japan (BoJ).
USD/JPY jumped sharply in early U.S. trading, rallying to around 145.00—up nearly 1% on the day—after staying range-bound through the Asian and European sessions.
The June NFP report showed the U.S. economy added 147,000 jobs, exceeding expectations of 110,000 and slightly above May’s revised figure of 144,000. Meanwhile, the Unemployment Rate unexpectedly fell to 4.1% from 4.2%, beating forecasts of a rise to 4.3%.
Initial Jobless Claims outperformed expectations, declining by 4,000 to 233,000 for the week ending June 28. However, Average Hourly Earnings fell short of forecasts, pointing to some cooling in wage growth despite the strong labor market data.
The robust employment figures reinforced confidence in the U.S. economy’s resilience, prompting markets to scale back expectations for an imminent Federal Reserve rate cut. In response, Treasury yields climbed, lifting the US Dollar and driving renewed gains in USD/JPY as investors reassessed the Fed’s policy outlook.
On the other hand, comments from Bank of Japan (BoJ) board member Hajime Takata struck a mildly hawkish tone but failed to sway sentiment toward the Yen. Takata highlighted the need to resume rate hikes after a brief pause, while noting the BoJ remains in a “wait and see” stance amid uncertainty over the broader impact of U.S. trade measures on Japan’s economy.
USD/JPY TECHNICAL ANALYSIS CHART:
Technical Overview:
USD/JPY is trading within a down channel.
USD/JPY is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying Zone, while the Stochastic oscillator suggests a Positive trend.
Immediate Resistance level: 145.50
Immediate support level: 144.04
HOW TO TRADE USD/JPY
After a sharp decline, USD/JPY entered a consolidation phase and briefly broke to the upside. However, the move couldn’t sustain, leading to a pullback. The pair has surged past the immediate support zone and the previous day’s high, driven by strong bullish momentum. If USD/JPY holds above this level, it could extend its move toward the next major resistance.
