The Japanese Yen (JPY) is strengthening against the US Dollar (USD) as we approach the release of the Nonfarm Payrolls (NFP) data for September in the United States, scheduled for 12:30 GMT.
During European trading, the USD/JPY pair fell by 0.3% to about 157.60, influenced by the weakness of the US Dollar. The US Dollar Index (DXY), which tracks the Greenback against six major currencies, is trading down 0.15% at around 101.88. It seems to be adjusting after recently hitting a yearly high of 102.20 on Thursday.
Analysts at OCBC noted that the Bloomberg consensus anticipates “nonfarm payrolls to rise by 90,000 for September, down from 162,000 in August, with the unemployment rate expected to stay steady at 4.1%.”
They also pointed out that “recent jobless claims data have been trending lower, indicating that labor market conditions remain solid.” In their perspective, “the probability of an upside surprise in payrolls seems to be increasing,” adding that “a stronger-than-expected employment report could bolster expectations for further tightening by the Fed and lend more support to the USD.”
On the Yen’s side, the Consumer Price Index (CPI) data for Tokyo in September came in higher than forecasted. The Tokyo CPI, excluding fresh food, surged to 2.7% Year-on-Year (YoY) from 1.8% in August. Analysts had expected it to be at 2.4%. Moreover, the Tokyo CPI excluding food and energy rose significantly to 3% YoY compared to the previous reading of 2%.
USD/JPY Technical Analysis
Currently, in the daily chart, USD/JPY is at 157.61. The pair exhibits a mildly bullish near-term outlook as it trades above the 20-period exponential moving average (EMA) at 157.26, indicating ongoing demand after a recent rally from the mid-153s.
The Relative Strength Index (14) stands at 51.50, slightly above its neutral line, which suggests a steady, gradual rise instead of a robust trend.
On the downside, immediate support can be found at the 20-day EMA at 157.26, followed by a low of 156.38 recorded on September 30. Looking up, the immediate resistance is at the September 24 high of 159.04. If it surpasses that, the next critical resistance level would be the September 2 peak at 160.39.
