The Japanese yen triggers the data of strong salary growth; USD/JPY falls in mid -153.00

  • The Japanese yen jumps to a maximum of more than a month in front of the USD in the middle of bets for a rise in the Boj’s rates.
  • The expectations of greater narrowing of the rate differential between Japan and the US also underpin the JPY.
  • A positive risk tone could limit the safe refuge JPY in the midst of concerns about Trump’s commercial tariffs.

The Japanese Yen (JPY) attracts new buyers after the data published during the Asian session on Wednesday shows an increase in the real salaries of Japan, which reaffirms the bets that the Bank of Japan (Boj) will raise the fees again of interest. This marks a great divergence compared to the expectations that the Federal Reserve (FED) will reduce indebtedness costs twice by the end of this year. The narrowing resulting from the rate differential between Japan and the USA further benefits the JPY of lower performance.

Apart from this, an American dollar (USD) softer dragged the USD/JPY torque in mid -153.0, or its lowest level since December 18 in the last hour. Meanwhile, investors are still concerned that Japan is also an eventual objective of the US president of the US president, Donald Trump. This, together with the mood of risk, could prevent operators from collaborating with new bullish bets around the safe refuge jpy. However, the fundamental background supports the perspectives of a greater appreciation of the JPY.

The Japanese yen is strengthened as the increase in real wages in Japan drives bets due to a rise in BOJ rates

  • Preliminary government data published Wednesday revealed that real -adjusted real wages in Japan increased 0.6% in December compared to the previous year. In addition, the reading of the previous month was checked to show a 0.5% increase compared to the 0.3% drop originally reported.
  • Meanwhile, the inflation rate to the consumer that the government uses to calculate real wages accelerated from 3.4% from November to 4.2%, or the fastest rate from January 2023. This, in turn, supports the prospects of a greater hardening of politics by the Bank of Japan and elevates the Japanese yen.
  • A survey compiled by S&P Global Market Intelligence showed that Japan’s service activity expanded for the third consecutive month in January. In fact, the Au Jibun Bank services purchasing managers index (PMI) rose from 50.9 to 53.0 in January, marking the highest level since September 2024.
  • The US Labor Statistics Office (BLS) reported in the Employment and Labor Rotation Survey (Jolts) on Tuesday that the number of employment offers on the last business day of December was 7.6 million. This was below 8.09 million offers in November and the expectations of 8 million.
  • The data pointed to a slowdown in the labor market, which could allow the Federal Reserve to further reduce rates. This marks a great divergence compared to the hard line expectations of the BOJ and drags to the USD/JPY torque to a minimum of more than a month during the Asian session on Wednesday.
  • The Vice President of the Fed, Philip Jefferson, said Tuesday that there is no need to hurry with more rates cuts, since a strong economy makes caution appropriate. It is likely that interest rates will fall in the medium term and the Fed faces uncertainty about government policy, Jefferson added.
  • The president of the USA, Donald Trump, offered concessions to Canada and Mexico by delaying commercial tariffs of 25% for 30 days. In addition, the hopes of a commercial advance between the US and China help relieve the fears of a commercial war and remain favorable for the predominant risk environment.
  • Investors are still worried that Japan is also an eventual objective of Trump’s commercial tariffs. Japan’s Prime Minister Shigeru Ishiba will meet Trump at the end of this week and his conversation could provide more clues about the risk, since Japan has a large commercial surplus with the USA.
  • The operators now expect the US economic agenda, which includes the publication of the ADP report on employment in the private sector and the ISM services PMI. The data provides some impulse to the US dollar before the long -awaited report of non -agricultural payrolls of Friday.

The USD/JPY seems vulnerable to a greater fall; Breaking below the level of 154.00 at stake

FXSoriginal

From a technical perspective, intradicate break and acceptance below the level of 154.00 could be seen as a new trigger for bearish operators. In addition, the oscillators in the daily chart have been gaining negative traction and are still far from being in overall territory. This, in turn, suggests that the least resistance path for the USD/JPY torque is down and supports the perspectives of an additional depreciation movement. Therefore, a subsequent fall towards the level of 153.00, en route to the single mobile average (SMA) of 100 days, currently located near the region of 152.45, it seems a different possibility.

On the other hand, any attempt at recovery could face immediate resistance near the round figure of 154.00. Some follow-up purchases, however, could cause a short coverage rally and raise the USD/JPY to the intermediate obstacle of 154.70-154.75 en route to the psychological brand of 155.00. Meanwhile, an additional upward movement could be seen as an opportunity for sale and remain limited near the region of 155.25-155.30. The latter should act as a key fundamental point, which if decisively clears, will deny the negative perspective and change the short -term bias in favor of the upward operators.

Economic indicator

Labor gains (yoy)

Indicator published by the Ministry of Health, Labour and Welfare which shows the average income, before taxes, of each regular employee. It includes payments of overtime and bonds, but does not take into account income from investments in financial assets or capital gains. Revenue increases impose bullish pressures on consumption, therefore, an increasing trend in income is inflationary for the Japanese economy. A result greater than expectations is bullish for YEN, while a result lower than the market consensus is bassist.


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Last publication:
MAR FEB 04, 2025 23:30

Frequency:
Monthly

Current:
4.8%

Dear:
3.8%

Previous:
3%

Fountain:

Ministry of Economy, Trade and Industry of Japan

Source: Fx Street

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