USD/JPY steadies near 154.00 as markets weigh weak US jobs data and cautious BoJ stance

• USD/JPY steadies near 154.00 after touching a nine-month high earlier in Asian session.
• Weak US labor data reinforces expectations for a Federal Reserve rate cut in December.
• Japan’s Economy Minister Kiuchi warns that a weak Yen and high inflation are hurting consumers as Tokyo readies a new stimulus plan.

The Japanese Yen (JPY) trades little changed against the US Dollar (USD) on Tuesday, with USD/JPY showing limited direction despite a softer Greenback as investors remain cautious over the Bank of Japan’s (BoJ) monetary policy path.

At the time of writing, USD/JPY is trading around 154.00, after two-way swings earlier in the session that saw the pair briefly climb to a fresh nine-month high near 154.50 before reversing lower. The intraday pullback followed disappointing labor data from the United States, which added to signs of a cooling job market and reinforced expectations for further monetary easing by the Federal Reserve (Fed).

Data released by ADP showed that the United States lost an average of 11,250 private-sector jobs in the four weeks ending October 25, compared with 14,250 previously. The weak reading heightened worries about slowing labor momentum, strengthening the view that the Fed may need to act sooner to support the economy. According to the CME FedWatch Tool, markets now price in a 70% probability of a December rate cut, up from 62% a day earlier.

The US Dollar Index (DXY), which measures the Greenback’s value against a basket of six major peers, is holding near 99.40, close to a two-week low, marking five consecutive days of declines.

Meanwhile, in Japan, remarks from Economy Minister Yoshitaka Kiuchi earlier on Tuesday highlighted renewed concern about the effects of a weak Yen and elevated inflation. Kiuchi said the government aims to achieve wage growth that exceeds inflation, while pledging to expand and implement measures to cushion the impact of higher prices on households. He acknowledged that the Yen’s depreciation is raising import costs and that persistent inflation is weighing on private consumption.

The Japanese government is also preparing a new growth-oriented stimulus package, expected to be finalized on November 21, which will call on the BoJ to focus on sustainable economic growth alongside price stability. A key adviser to Prime Minister Sanae Takaichi recently urged the central bank to avoid raising rates this year, warning that premature tightening could undermine Japan’s fragile recovery.