USD/JPY breaks below 115.00 on falling US yields and risk aversion

• The US jobs report shows better than expected numbers.
• The US dollar and Japanese yen rose broadly on risk aversion.
• USD/JPY is the worst performer in weeks weakened by lower US yields.

After trading for hours in the 115.50/115.25 range, the USD/JPY It broke lower, falling to 114.90, the lowest level since the Asian session on Wednesday. It remains below 115.00, with a bearish tone.

If USD/JPY continues to slide, it would probably test the weekly low at 114.67. The next support lies at 114.40. On the upside, immediate resistance is now 115.25, followed by 115.55.

The most important driver for the markets remains the Russian invasion. US economic data beat expectations but did not make any difference to market sentiment. Payroll increased by 678,000 in February, above the 400,000 expected. It was the best month since July. The unemployment rate fell from 4% to 3.8%, even as the labor participation rate also increased. Median hourly earnings stagnated in February versus expectations for a 0.5% rise.

“The strong payroll report did little to change the market price for rate hikes, although weaker wages ease some of the pressure on the Fed to tighten policy faster. We expect markets to be buoyed by near-term geopolitical uncertainty as investors brace for rate hikes,” TD Securities analysts explained.

US yields broke lower after the opening bell on Wall Street. 10-year yields stand at 1.71% and 30-year yields at 2.13%. The drop in yields is adding more strength to the Japanese yen. The Dow Jones falls 1.38% and the Nasdaq fell 1.68%.

Technical levels