USD/JPY extends its gains for the second successive day, trading around 161.70 during the Asian hours on Monday. The Japanese Yen (JPY) is caught in a high-stakes tug-of-war, buckling under surging import costs even as 10-year JGB yields hit a fresh 30-year high of 2.79%.

On Monday, the People’s Bank of China (PBOC) sets the USD/CNY central rate for the trading session ahead at 6.8066 compared to Friday's fix of 6.8047 and 6.7850 Reuters estimate.

The EUR/USD pair kicks off the new week on a subdued note and oscillates in a narrow band below mid-1.1400s during the Asian session. Spot prices, however, remain within striking distance of a nearly two-week high, touched last Thursday, amid mixed fundamental cues.

AUD/USD declines after two days of gains, trading around 0.6930 during the Asian hours on Monday. The currency pair loses ground following the release of TD-MI Inflation Gauge data, which came in at -0.4% month-over-month, against the -0.3% prior.

The Kiwi Dollar clears the 0.5700 figure on Friday, clings to gains of over 0.22% against the Greenback after hitting a daily low of 0.5689. At the time of writing, the NZD/USD trades at 0.5709.

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.

ABN AMRO’s Bill Diviney expects the US Dollar to weaken broadly but notes slightly less upside for EUR/USD after revising the bank’s ECB outlook and incorporating French and US election risks.

USD/CHF heads for its first weekly loss in five weeks as weaker-than-expected US Nonfarm Payrolls (NFP) data released on Thursday weighed on the US Dollar (USD). The pair rebounds on Friday as the Greenback stabilizes, with traders reassessing the Federal Reserve's (Fed) interest rate outlook.

EUR/USD holds onto modest gains on Friday but struggles to extend its advance as the US Dollar (USD) stabilizes following Thursday's weaker-than-expected US jobs report. Market activity remains subdued as US financial markets are closed for the Independence Day holiday.

The British Pound steadied against the US Dollar on Friday, but it is poised to end the week with gains of over 1% as investors turn skeptical that the Federal Reserve will raise interest rates at the September meeting. The GBP/USD consolidates at around 1.3350, unchanged.

The AUD/USD pair climbs near the 0.6940 level on Friday as the US Dollar (USD) remains under pressure following softer-than-expected United States (US) labor market data released on Thursday.

NZD/USD trades around 0.5710 at the time of writing on Friday, up 0.21% on the day, supported by improved risk sentiment and a weaker US Dollar (USD) following a softer-than-expected US employment report.

ABN AMRO’s Georgette Boele warns that USD/JPY trading near multi-decade highs has heightened the risk of intervention in the Japanese Yen (JPY). She notes markets are long Dollars and extremely short Yen, leaving room for a sharp reversal if sentiment shifts.

USD/JPY rebounds on Friday after falling nearly 0.90% in the previous session, amid speculation that Japanese authorities may have intervened in the foreign exchange market after the Japanese Yen slid to a 40-year low earlier this week.

ING’s Francesco Pesole notes USD/JPY volatility and suggests an initial move lower may already have involved FX intervention. With US holidays thinning liquidity, he sees elevated risk of further Japanese action, consistent with past behaviour.

USD/CAD trades higher on Friday, rising 0.13% to near 1.4200 at the time of writing. The pair remains supported as persistent weakness in the Canadian Dollar (CAD) outweighs the pressure on the US Dollar (USD) following softer-than-expected US labor market data.

EUR/GBP trades in a narrow range on Friday, with the Euro (EUR) modestly outperforming the British Pound (GBP) as sellers take a breather following a four-day decline that dragged the cross to a one-year low.

MUFG’s Derek Halpenny notes that EUR/USD could benefit from US Dollar weakness and a still-hawkish European Central Bank. Derek Halpenny highlights that LNG prices remain elevated versus pre-conflict levels, keeping Eurozone inflation risks higher.

Societe Generale strategists note that South Africa’s National Treasury will tap existing rand-denominated sukuk bonds as part of its current fiscal year funding plans, with issuance size and timing still unknown.

Brazil Industrial Output (YoY) below forecasts (1.3%) in May: Actual (0.2%)

Brazil Industrial Output (MoM) below forecasts (0.3%) in May: Actual (-0.2%)

The Euro (EUR) trades higher for the second consecutive day on Friday, with the US Dollar (USD) on its back foot in the aftermath of the disappointing US Nonfarm Payrolls (NFP) report released on Thursday. The EUR/USD pair, however, is struggling to breach resistance at 1.1475 so far.

UOB’s Quek Ser Leang highlights that USD/JPY’s unexpected plunge to 160.62 has shifted the short-term bias lower, even as oversold conditions suggest scope for a rebound within 160.80–161.90 intraday.

The Australian Dollar (AUD) is up against its major currency pairs, trading 0.23% higher to near 0.6940 against the US Dollar (USD) during the European trading session on Friday. The Aussie pair gains as a slight decline in hawkish Federal Reserve (Fed) prospects has lifted market sentiment.

Commerzbank’s Charlie Lay and Dr. Henry Hao note that weaker US non-farm payrolls and reduced Fed rate hike expectations weighed on the Dollar, supporting the Japanese Yen. USD/JPY fell sharply as markets priced a smaller cumulative hike by year-end and speculated about possible FX intervention.

The Japanese Yen (JPY) has staged a sharp recovery against the US Dollar, surging from a 40-year low at around 162.50 down to the 160-61 handle. 

ING’s Francesco Pesole highlights that EUR/USD price action after the US jobs report underlines the lack of a strong bullish narrative for the Euro, as markets doubt further ECB hikes. Softer inflation and low Oil prices weigh on expectations.

The USD/CAD pair reflects a subdued performance near 1.4175 during the European trading session on Friday. The Loonie pair edges lower as the US Dollar (USD) faces selling pressure due to easing hawkish Federal Reserve (Fed) prospects.

UOB’s Quek Ser Leang notes that AUD/USD’s abrupt jump to 0.6943 was not sustained, leaving the pair likely to consolidate between 0.6895 and 0.6945 in the near term.

The USD/JPY pair turns lower for the second straight day following an intraday uptick to mid-161.00s and drops to a more than two-week low during the first half of the European session on Friday.