USD/JPY snaps three-day losing streak above 153.50, Yellen counsels caution on currency intervention

■USD/JPY gains ground near 153.55 in Monday’s Asian session. 

■US Treasury Secretary counsels caution on currency intervention from Japanese authorities. 

■The US NFP increased by 175K in April, compared to 315K in March, missing the estimation of 243K. 

The USD/JPY pair snap a three-day losing streak during the Asian trading hours on Monday. The uptick of the pair is bolstered by the modest rebound of the US Dollar (USD) and US Treasury Secretary Janet Yellen’s comments on potential Japanese interventions last week. The pair currently trades around 153.55, adding 0.35% on the day.  
 
US Treasury Secretary Janet Yellen noted on the weekend the sharp movements in the Japanese Yen's value last week but declined to comment on whether Japan intervened to support the currency. “I’m not going to comment on whether they did or didn’t intervene,” Yellen said. Her comments on prospective Japanese interventions have varied over the last two years, often emphasizing a Group of Seven agreement in support of market-determined currency rates. Yellen emphasized that interventions should only try to reduce market volatility rather than manipulate currency rates. Meanwhile, Japan's Finance Minister Shunichi Suzuki did not confirm the interventions, as per Bloomberg.

The growing speculation that the US Federal Reserve (Fed) will cut the interest rate in September after the release of weaker-than-expected US employment data has exerted some selling pressure on the Greenback. According to the CME Fedwatch tool, traders are now pricing in an 85.5% chance that June will still see no change to the Fed fed fund rate, while the odds of a September rate cut rise to 90%. 

The US employment report released on Friday showed hints that the US economy is slowing. The Nonfarm Payrolls (NFP) increased by 175K in April, from 315K in March (revised from 303K), falling short of the estimated 243K. The figure was the lowest increase since October 2023. The Unemployment Rate rose to 3.9% in April, while Average Hourly Earnings fell by 3.9% year on year. Finally, the US ISM Services PMI slipped into contractionary territory, dropping from 51.4 in March to 49.4 in April, below the market estimate of 52.0.