The Japanese Yen clings to profits inspired by solid data of household expenses

• The Japanese Yen attracts buyers as the optimistic data reaffirmed the bets for a rise in boxwood.
• The fiscal concerns of the US weakens the USD and weigh even more about the USD/JPY torque.
• Divergent expectations between the BOJ and the Fed support the possibility of more losses for the pair.

The Japanese Yen (JPY) is strengthened during Friday’s Asian session after the publication of solid data on household spending, which keeps open the possibility of more increases in interest rates by the Bank of Japan (BOJ). This, together with a modest recoil of the US dollar (USD), moves the USD/JPY to a maximum of a week, around the region of 145.20-20-145.25 reached in reaction to the optimistic monthly employment data of the United States on Thursday.

Meanwhile, investors are still concerned that global commercial tensions caused by the tariff policies of US President Donald Trump can complicate the Boj’s efforts to normalize monetary policy. Apart from this, the appetite environment for the risk could limit the profits of the safe refuge and help contain the losses of the USD/JPY torque. Operators could also refrain from opening aggressive directional bets in the middle of the expected low liquidity due to a holiday in the US.

The Japanese Yen is strengthened in reaction to the strongest data on household spending

• The US Labor Statistics Office (BLS) on Thursday that the economy added 147,000 new jobs in June compared to the revised reading of the previous month of 144,000 and the 110,000 expected. In addition, the unemployment rate fell to 4.1% from 4.2% in May, indicating an still resilient labor market.
• The upper result gives the Federal Reserve Space to keep its focus on waiting and see in the midst of uncertainty derived from the commercial policies of President Donald Trump. This, in turn, pushed the US dollar (USD) and the USD/JPY to a new weekly maximum, although the impulse lacked a strong continuity or bullish conviction.
• Additional details revealed that the growth of annual salary inflation, measured by the change in average hourly profits, retreated 3.7% from 3.8% in May. This was below the estimation of analysts of an increase of 3.9%. This, together with concerns about the worsening of the US fiscal condition, helps to limit the increase in the dollar.
• The bill of tax cuts and expenses of President Donald Trump exceeded his latest obstacle in Congress on Thursday, avoiding the short -term perspective of a default of the US government. The legislation would exploit the federal deficit, since it is estimated to add 3.4 billion dollars to the national debt during the next decade. This would further aggravate the long -term debt problems in America and stop the USD bulls when opening aggressive bets, limiting the USD/JPy pair.
• Meanwhile, Japanese Yen attracts some purchases during Friday’s Asian session after a government report showed that household spending even exceeded the most optimistic estimates and increased 4.7% in May compared to the previous year. Optimistic data rekindle speculation on short -term interest rates ups to the Bank of Japan.
• In contrast, operators still see a greater possibility that the Fed resumes their cycle of rate cuts in September and reduces indebtedness costs in at least 50 basic points by the end of this year. This contributes to the fall of the USD/JPY torque, although commercial uncertainties could stop the operators of opening aggressive directional bets.

The USD/JPY technical configuration justifies caution for bullies; The level of 144.00 is key

The night break through the confluence of 144.65-144.70-which includes the simple mobile average (SMA) of 100 periods in the 4-hour graph and the level of fibonacci setback of 38.2% of the fall of June-July-was seen as a key trigger for the USD/JPY bullies. However, the failure near the supply zone of 145.25, which approximates the 50%setback level, and the subsequent setback justify a certain caution before positioning for any significant increase.

Meanwhile, any additional fall will probably find some support near the horizontal zone of 144.20 before the round figure of 144.00, or the retreat level of 23.6% of Fibonacci. A convincing rupture below the latter could change the bias again in favor of the bearish operators and drag to the USD/JPY torque towards the intermediate support of 143.45 en route towards the level of 143.00. The descending trajectory could extend even more towards the region of 142.70-142.65, or a minimum of one month reached on Tuesday.

On the other hand, the psychological level of 145.00 could now act as an immediate obstacle before the 145.25-145.30 area. Some purchases of continuation should allow the USD/JPY to test the 61.8% fibonacci level and conquer the round figure of 146.00.