- The yen remains weak on all fronts.
- USD/JPY firm above 140.00, supported by monetary policy divergence.
- Growing expectation for the US August employment report.
The USD/JPY is trading around 140.30, at a price level not seen since 1998. The pair reached as high as 140.42 and then pulled back slightly to 140.10. The focus is on the US employment report.
On Friday the dollar The market is pulling back modestly, but this is not enough to send USD/JPY down. The yen is among the weakest currencies on Friday ahead of the key data. The rise in the yields of European and US sovereign bonds together with the divergence in monetary policy between the Bank of Japan (ultra-expansive) and the rest of the central banks continues to be a factor of weakness for the yen .
The employment report will be published at 12:30 GMT, with the consensus pointing to a 300,000 rise in jobs in August. The US data can generate a great movement in the market, through the influence on expectations and also product of previous positioning.
If after the data, bonds rally and equity markets pull back at the same time, the yen could have a major recovery rally. If, on the other hand, bonds continue to decline, USD/JPY could extend the rise above 140.00.
Technical levels
Source: Fx Street
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