- US job report shows better-than-expected numbers.
- US dollar and Japanese yen up across the board on risk aversion.
- USD/JPY having worst performance in weeks weakened by lower US yields.
After trading for hours in the 115.50/115.25 range, USD/JPY broke to the downside, falling to 114.90, the lowest level since Wednesday’s Asian session. It remains under 115.00, with a bearish tone.
If the decline in USD/JPY continues, it would likely test the weekly low at 114.67. The next support stands at 114.40. On the upside, the immediate resistance now is 115.25, followed by 115.55.
The most important driver for markets continues to be the Russian invasion. Economic data from the US came in above expectations but made no difference on market sentiment. Payroll rose by 678K in February, above the 400K expected. It was the best month since July. The unemployment rate dropped from 4% to 3.8%, even as the labor participation rate also rose. Average hourly earnings stagnated in February against expectations of a 0.5% increase.
“The strong payroll report did little to change the market pricing for rate hikes, though weaker wages ease some of the pressure on the Fed to tighten policy faster. We expect markets to be driven by geopolitical uncertainty in the near-term as investors prepare for rate hikes”, explained analysts at TD Securities.
US yields broke lower after the opening bell at Wall Street. The 10-year yield stands at 1.71% and the 30-year at 2.13%. The decline in yields is adding more strength to the Japanese yen. The Dow Jones is falling by 1.38%, and the Nasdaq declines 1.68%.