USD/JPY holds positive ground above 161.00, all eyes on US NFP data
The post USD/JPY holds positive ground above 161.00, all eyes on US NFP data appeared on BitcoinEthereumNews.com.
USD/JPY trades on a stronger note near 161.40 in Friday’s early Asian session. The divergence of monetary policy between Japan and the US continues to undermine the JPY. The rising expectation of Fed rate cuts this year and the fear of FX intervention might cap the pair’s upside. The USD/JPY pair remains strong near 161.40 on Friday during the early Asian session. The US Dollar (USD) continues to strengthen to nearly fresh 38-year highs against the Japanese Yen (JPY) amid the wide rate differential between Japan and the US. Later on Friday, traders will closely watch the US June employment data, including Nonfarm Payrolls (NFP), Unemployment Rate, and Average Hourly Earnings. The uptick in USD/JPY raises expectations of foreign exchange (FX) intervention from Japanese authorities. “In the interim, USD/JPY will look to UST yields, US Dollar (USD) for directional cues. For USD/JPY to turn lower, that would require the USD to turn/Fed to cut or for BoJ to signal an intent to normalize urgently (rate hike or increase pace of balance sheet reduction). None of the above appears to be taking place,” said OCBC strategists Frances Cheung and Christopher Wong. According to the Federal Open Market Committee (FOMC) meeting on June 11–12, Federal Reserve (Fed) officials emphasized the data-dependent approach and refrained from committing to interest rate cuts until further observation. Some Fed officials lacked the confidence they needed to cut the interest rate, while several policymakers stated that it’s necessary to hike again if inflation were to rebound. Nonetheless, the upside of the Greenback might be capped as the recent softer US PCE inflation data and weaker-than-expected Services PMI fuel expectations of Fed interest rate cuts this year. Traders will take more cues from the US employment data for June later in the day. The US NFP is estimated to show 190K job…
Filed under: News - @ July 5, 2024 3:16 am