USD/JPY pulls back from multi-decade highs after NFPs

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  • US economy adds 315,000 jobs in August, unemployment rate rises to 3.7%.
  • USD/JPY pulls back on dollar weakness after NFPs.
  • The yen remains under pressure, now due to risk appetite.

The USD/JPY it is falling modestly on Friday, having previously reached 140.79, the highest level since 1998. The weakness of the dollar in general weighed on the pair after the official US employment report.

US yields fall sharply

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Nonfarm payrolls increased by 315,000 in August, versus expectations for a 300,000 increase. The unemployment rate unexpectedly rose from 3.5% to 3.7%, however, the labor participation rate also increased.

Following the report, US yields fell sharply favoring USD/JPY’s decline. The US 10-year yield fell to 3.17% and the 2-year Treasury yield fell from 3.52% to 3.40%. At the same time, stock prices on Wall Street rose. The Dow Jones rose 0.81% and the Nasdaq 0.79%. The Japanese yen failed to rally broadly on the back of improving risk sentiment.

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Despite Friday’s decline, USD/JPY is about to post the third consecutive weekly rise and the highest close since 1998. The divergence between the monetary policy of the Bank of Japan and that of the Federal Reserve continues to drive the pair upward. At its next meeting, the Bank of Japan is expected to maintain its ultra-loose stance, while the Fed is seen raising rates by 50 or 75 basis points.

Technical levels

USD/JPY

Panorama
Last Price Today 140.12
Today’s Daily Change -0.08
Today’s Daily Change % -0.06
Today’s Daily Opening 140.2
Trends
20 Daily SMA 136.11
50 Daily SMA 136.04
100 Daily SMA 133.19
200 Daily SMA 124.84
levels
Previous Daily High 140.23
Previous Daily Minimum 138.78
Previous Maximum Weekly 137.76
Previous Weekly Minimum 135.81
Monthly Prior Maximum 139.08
Previous Monthly Minimum 130.4
Daily Fibonacci 38.2% 139.67
Daily Fibonacci 61.8% 139.33
Daily Pivot Point S1 139.24
Daily Pivot Point S2 138.28
Daily Pivot Point S3 137.79
Daily Pivot Point R1 140.7
Daily Pivot Point R2 141.19
Daily Pivot Point R3 142.15

Source: Fx Street

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