Japanese Yen Fails to Hold Gains Despite Weaker US Economic Data

The Japanese Yen (JPY) lost its gains against the US Dollar (USD) despite weaker-than-expected US economic data. The USD/JPY pair rebounded to around 157.65 on Friday, down only 0.28% for the day after briefly falling below 157.00 following the release of the US employment report.

The US Bureau of Labor Statistics reported Nonfarm Payrolls (NFP) increased by only 29K in September, well below market expectations of 90K. The Unemployment Rate rose to 4.2%, while Average Hourly Earnings rose 3% YoY, below expectations of 3.2%. This data weighed on the US Dollar and reduced expectations of an interest rate hike.

However, despite hotter-than-expected Tokyo inflation, which accelerated to 2.7% YoY in September from 1.8% in August, the Japanese Yen failed to hold onto its gains against the US Dollar. The Bank of Japan's hawkish signals also did not support the Yen, with several policymakers supporting additional interest rate hikes.

The USD/JPY technical analysis suggests a bearish near-term bias, with immediate support at 157.00 and a lower floor at 156.50. On the topside, initial resistance is seen at the 100-period SMA at 157.53.