USD / JPY bounces from 111.50 reaching new yearly highs above 112.00

• The dollar resumes its uptrend to hit new multi-month highs at 112.20.
• The USD, ignored by the weak US employment report
• USD / JPY: An appreciation of 113.00 is appreciated at the end of 2022.

The USD It has retraced the previous slide towards the session lows at 111.00 previously seen on Friday, to break the previous year’s highs at 112.05 and attack the February 2020 high at 112.20.

NFP report does not affect USD / JPY strength

The dollar has ignored the negative impact caused by the weaker-than-expected US employment report and has resumed its uptrend. The USD / JPY pair has rebounded after a brief hesitation and is on track to close out its best weekly performance in the last six months.

Employment in the United States increased less than expected in September, with 194,000 new jobs instead of the nearly 500,000 predicted by market analysts. These figures weighed on the US dollar for some time, although the fundamental support of the dollar remains intact. The weak job creation in September is unlikely to deter the Federal Reserve from announcing the beginning of the bond phasing, which is one of the main drivers of the recent USD rally.

USD / JPY: Seen at 113.00 in late 2022 – Westpac

From a broader perspective, Westpac’s currency analysis team expects the pair to continue to appreciate over the next few years: “The BoJ will have no choice but to continue its extraordinary measures to their fullest extent for the foreseeable future, hoping to move towards 2.0% annual inflation, while the rest of the world normalizes (…) the USD / JPY, therefore, it is estimated at 112 at the end of 2021; 113 late 2022; and 116 by the end of 2023. “

Technical levels