USD/JPY consolidates below 147.00, awaits US NFP report before the next leg up

Source Fxstreet
  • USD/JPY enters a bullish consolidation phase near its highest level since August 19.
  • Bulls seem reluctant to place fresh bets ahead of the release of the US NFP report. 
  • BoJ rate hike uncertainty and reduced bets for a 50 bps Fed rate cut lend support.

The USD/JPY pair is seen oscillating in a narrow range during the Asian session on Friday and consolidating its weekly gains to the highest level since August 19 touched the previous day. Spot prices currently trade below the 147.00 mark, unchanged for the day, as traders opt to move to the sidelines ahead of the release of the closely-watched US monthly employment details.

The popularly known US Nonfarm Payrolls (NFP) report is expected to show that the economy added 140K jobs in September, slightly lower than the 142K in the previous month, and the Unemployment Rate held steady at 4.2%. Apart from this, Average Hourly Earnings will be looked upon for cues about the size of the Federal Reserve's (Fed) rate cut at its next policy meeting in November. This, in turn, will play a key role in driving the demand for the US Dollar (USD) and provide some meaningful impetus to the USD/JPY pair. 

Heading into the key data risk, investors have been scaling back their bets for a more aggressive policy easing by the Fed amid signs of a still resilient US labor market. This pushed the USD Index (DXY), which tracks the Greenback against a basket of currencies, to a one-month top on Thursday. Furthermore, reduced bets for more BoJ rate hikes in 2024, along with the political uncertainty ahead of a snap election in Japan on October 27, could undermine the Japanese Yen (JPY) and act as a tailwind for the USD/JPY pair. 

Nevertheless, spot prices remain on track to register strong gains for the second week in the previous three and barring any big negative surprises from the US jobs data, the fundamental backdrop supports prospects for further gains. That said, persistent geopolitical risks stemming from the ongoing conflicts in the Middle East and the risk of a full-blown war in the region could benefit the safe-haven JPY. This might turn out to be the only factor holding back bullish traders from placing aggressive bets around the USD/JPY pair.

Economic Indicator

Nonfarm Payrolls

The Nonfarm Payrolls release presents the number of new jobs created in the US during the previous month in all non-agricultural businesses; it is released by the US Bureau of Labor Statistics (BLS). The monthly changes in payrolls can be extremely volatile. The number is also subject to strong reviews, which can also trigger volatility in the Forex board. Generally speaking, a high reading is seen as bullish for the US Dollar (USD), while a low reading is seen as bearish, although previous months' reviews ​and the Unemployment Rate are as relevant as the headline figure. The market's reaction, therefore, depends on how the market assesses all the data contained in the BLS report as a whole.

Read more.

Next release: Fri Oct 04, 2024 12:30

Frequency: Monthly

Consensus: 140K

Previous: 142K

Source: US Bureau of Labor Statistics

America’s monthly jobs report is considered the most important economic indicator for forex traders. Released on the first Friday following the reported month, the change in the number of positions is closely correlated with the overall performance of the economy and is monitored by policymakers. Full employment is one of the Federal Reserve’s mandates and it considers developments in the labor market when setting its policies, thus impacting currencies. Despite several leading indicators shaping estimates, Nonfarm Payrolls tend to surprise markets and trigger substantial volatility. Actual figures beating the consensus tend to be USD bullish.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
US October PPI Preview: Fed Rate Hike Expectations Rise, PPI May Be Key Variable; How Will US Stocks, Dollar, and Gold Move?On Friday (Nov. 13) Eastern Time, the U.S. will release the October Producer Price Index (PPI). Following the October CPI once again exceeding expectations, the market will look to the PP
Author  TradingKey
14 hours ago
On Friday (Nov. 13) Eastern Time, the U.S. will release the October Producer Price Index (PPI). Following the October CPI once again exceeding expectations, the market will look to the PP
placeholder
Gold closed below $4,000 again — the ETF crowd and central banks stayed, the momentum money leftSpot gold is trading near $3,999, its third consecutive lower daily low, after a 5.00% 10-year yield and a 102.85 dollar index raised the odds of a December hike to 87%. But the selling is not coming from the strategic holders: managed-money net longs fell to 324 tonnes, a 21-week low, and Goldman Sachs attributes roughly 95% of five weeks of selling to non-reportable positions. ETFs still hold a record 4,256 tonnes and central banks bought 321 tonnes in Q3. The table below sets the triggers, directions and levels.
Author  Irene Q.
20 hours ago
Spot gold is trading near $3,999, its third consecutive lower daily low, after a 5.00% 10-year yield and a 102.85 dollar index raised the odds of a December hike to 87%. But the selling is not coming from the strategic holders: managed-money net longs fell to 324 tonnes, a 21-week low, and Goldman Sachs attributes roughly 95% of five weeks of selling to non-reportable positions. ETFs still hold a record 4,256 tonnes and central banks bought 321 tonnes in Q3. The table below sets the triggers, directions and levels.
placeholder
Nvidia slid 7.7% after hours while AMD and Broadcom rose — the AI trade changed hands, it didn't breakNvidia closed Wednesday at 173.73, up 2.87%, then fell as much as 8.1% to 159.44 after reports that its board was preparing for a possible leadership change. The same session, the Philadelphia Semiconductor Index rose 5.7% with all 30 components higher, CoreWeave jumped 24.7% on 168% revenue growth, and Micron added 11.9%. If AI demand were being repriced, AMD and Broadcom would not be bid. This is a governance discount on one name, and 204.54 — the 200-day average — is the level that settles it.
Author  Irene Q.
20 hours ago
Nvidia closed Wednesday at 173.73, up 2.87%, then fell as much as 8.1% to 159.44 after reports that its board was preparing for a possible leadership change. The same session, the Philadelphia Semiconductor Index rose 5.7% with all 30 components higher, CoreWeave jumped 24.7% on 168% revenue growth, and Micron added 11.9%. If AI demand were being repriced, AMD and Broadcom would not be bid. This is a governance discount on one name, and 204.54 — the 200-day average — is the level that settles it.
placeholder
Gold Extends Slide Below $4,000 as Rising US Inflation, Fed December Hike Bets Pressure Prices On November 12, gold prices (XAUUSD) extended their recent losses, falling further below $4,000 in early Asian trading to hit an intraday low near $3,968, marking a third consecutive day
Author  TradingKey
21 hours ago
On November 12, gold prices (XAUUSD) extended their recent losses, falling further below $4,000 in early Asian trading to hit an intraday low near $3,968, marking a third consecutive day
placeholder
Bitcoin lost its 200-day average — but the exit started three sessions before the CPIBitcoin fell 2.5% to about $73,400 on 11 November, an 11-week low, breaking its 200-day moving average near $73,100. The 24-hour liquidation tally reached $632 to $705 million, roughly 82% of it longs. But spot ETF outflows began three sessions earlier and USDT's market cap has shrunk $6.6 billion in 60 days — the leveraged length left before the inflation print did. A double top at 81,890 and 81,080 leaves a measured target of 69,366.
Author  Suzie
Yesterday 03: 22
Bitcoin fell 2.5% to about $73,400 on 11 November, an 11-week low, breaking its 200-day moving average near $73,100. The 24-hour liquidation tally reached $632 to $705 million, roughly 82% of it longs. But spot ETF outflows began three sessions earlier and USDT's market cap has shrunk $6.6 billion in 60 days — the leveraged length left before the inflation print did. A double top at 81,890 and 81,080 leaves a measured target of 69,366.
Related Instrument
goTop
quote