Japanese Yen holds steady amid US Independence Day holiday

• USD/JPY trims losses on Friday after hitting a two-week low.
• The Greenback regained some demand as investors reassessed the impact of Thursday’s weak US labor data and adjusted positions after the initial selloff.
• The Yen found limited support from Japan’s stronger Services PMI, which rose to 52.2 in June.

The USD/JPY pair posts modest gains on Friday amid thin trading due to the US Independence Day holiday. The US Dollar (USD) stabilizes against the Japanese Yen (JPY) after a sharp decline on Thursday following softer-than-expected United States (US) labor market data. At the time of writing, USD/JPY trades at 161.30 after falling to a two-week low of 160.49 earlier in the Asian session.

The Greenback weakened on Thursday after the latest US Nonfarm Payrolls report missed expectations, signaling that the labor market is cooling. Softer job creation reinforced expectations that the Federal Reserve (Fed) may have less room to keep interest rates restrictive for longer, weighing on US Treasury yields. However, the US Dollar later bounced back as traders adjusted positions after the initial selloff, helping USD/JPY regain traction.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 161.29. The pair hovers around the 100-period Simple Moving Average (SMA) at 161.29, leaving the near-term bias neutral as price consolidates between nearby levels. The 20-period SMA at 161.91 stands above current price and acts as dynamic resistance, suggesting upside attempts remain capped for now, while the Relative Strength Index (RSI) easing toward the mid-40s hints at fading bullish momentum rather than outright oversold conditions.

On the topside, immediate resistance appears at the horizontal barrier near 161.39, ahead of the 20-period SMA cluster around 161.91. On the downside, first support is seen at 161.12, with additional cushions at 160.90 and 160.79, where prior horizontal floors and the broader trend base converge, and a sustained break below these levels would tilt the bias more decisively in favor of sellers.

(The technical analysis of this story was written with the help of an AI tool.)