USD / JPY falls to test weekly lows around 113.50 despite upbeat US data.

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  • The US employment report for October beats expectations.
  • The US dollar weakens as Treasury yields decline despite employment data.
  • USD / JPY remains sideways, now testing a lower bottom.

The USD/JPY it peaked at 114.02 following the US jobs report and then turned lower. Recently, it bottomed at 113.48, the lowest level in three days. It is hovering around 113.50, near the lower limit of the range.

The official US employment report beat expectations, with a 531,000 payroll increase over the 425,000 market consensus. The dollar initially rose but then weakened amid declining US yields. The economic numbers were not strong enough to change the outlook for the November FOMC meeting. The views presented by Jerome Powell on Wednesday remain intact after today’s NFP figures.

The reversal in the bond market, with the US 10-year yield falling from 1.4% to 1.47%, the lowest level in a month, pushed USD / JPY lower. The USD / JPY pair received support from market sentiment. The Dow Jones was up 0.085% and the Nasdaq was up 0.60%.

Despite recent price action, USD / JPY continues to move sideways in a range between 113.40 and 114.20, now for more than two weeks. It is trading closer to the bottom of the range. A break below 113.40 could trigger a bearish correction. Still, the dominant trends are bullish.

Technical levels

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