USD/JPY rallies modestly after mixed NFPs and higher US yields.

• The USD/JPY pair is trading mostly flat at 145.46, after falling to a three-week low of 144.44.
• August US Non-Farm Payrolls beat estimates, but the Unemployment Rate missed, keeping the pair in check.
• Rising US Treasury yields provide some support for the USD.

The Dollar recovers against the Japanese Yen (JPY), after falling to three-week lows at 144.44, amid a charged economic agenda in the United States. US Treasury yields rise, boosting the dollar. The USD/JPY pair is trading at 146.196, up 0.45%.

The Dollar recovers from its three-week low against the Yen, despite mixed signals in the US labor market.

The busiest economic schedule in the US ended as the latest employment report, i.e. August Non-Farm Payrolls, beat estimates of 177,000, and the economy added 187,000, unchanged from July data. Although the report went well, and the dollar should have seen more robust appreciation, it did not. The unemployment rate came close to the US Federal Reserve forecast of 4.1% for 2023, which was 3.8% yoy, below estimates of 3.5%, the highest level since February 2022 .

In other data, business activity in the manufacturing sector improved, as shown by the August ISM Manufacturing PMI, which rose to 47.6, beating July’s drop of 46.4, and above estimates of 47. Most all sub-components of the index were up, except for new orders, which will improve as factory inventories remained at lower levels.

In Japan, manufacturing activity contracted, weighed down by costs, as revealed by the Jibun Bank Manufacturing PMI, which fell to 49.6, down from 49.7 the previous month, and the third month the index has been below the threshold. of 50 that separates expansion from contraction.

Given the fundamental background, USD/JPY remains bullish, but subject to FX intervention by the Japanese authorities, who have remained vigilant. On this issue, Japanese Finance Minister Shunichi Suzuki said that markets should fix currencies, although sharp movements are not desirable, adding that he is closely monitoring currency movements.

USD/JPY Price Analysis: Technical Insights

Price action sees the pair falling to a lower low than before at 144.53, opening the door for a deeper correction, but unless sellers step in and drag USD/JPY towards the 145.00 figure, bulls they keep control. Next resistance lies at 146.00, followed by the year-to-date high at 147.38.