Japanese Yen Fails to Hold Gains Against USD Despite Hot Inflation
The Japanese Yen failed to hold onto its gains against the US Dollar despite hot inflation and hawkish signals from the Bank of Japan. The USD/JPY pair rebounded towards 157.65 after briefly falling below 157.00 following the release of the US employment data.
The US Bureau of Labor Statistics reported that Nonfarm Payrolls increased by only 29K in September, well below market expectations of 90K. This weak job creation weighed on the US Dollar and reduced expectations of an interest rate hike.
However, the Japanese Yen's weakness was not enough to sustain its gains against the USD/JPY pair. The US Dollar Index fell 0.23% after the data and remains close to its daily lows.
The employment figures also triggered an adjustment in expectations surrounding the Federal Reserve's next monetary policy decision. Markets now assign around a 18% chance to an interest rate hike in October, down from roughly 24% before the NFP release.