USD/JPY Stagnates as US Data Disappoints and BoJ Tightening Expectations Rise

The USD/JPY currency pair remained largely unchanged on Wednesday, trading near 157.65 as the US dollar's weakness balanced growing support for the Japanese yen.

Softer-than-expected US economic data weighed on the greenback, with the ADP Employment Change report revealing that the private sector created only 44,000 jobs in July, falling short of the 70,000 expected and slowing from 98,000 in June.

The Institute for Supply Management (ISM) reported its Services PMI eased to 54.1, slightly below the consensus forecast of 54.5. The employment component dropped sharply to 47.4 from 51.2, signaling weaker hiring activity across the services sector.

Geopolitical developments also pressured the US dollar, as reports indicated that the US Treasury Department had lifted selected sanctions on Iran, including restrictions involving two aircraft and three airlines, fueling optimism that negotiations between Washington and Tehran were progressing.