USD/JPY Stuck in Range Amid Mixed Jobs Data and Geopolitical Risks
The USD/JPY currency pair is holding steady within a narrow range, trading around 157.70-157.75, after a limited rebound from below 157.00 last Friday. The pair has been trapped in this range for about a week, showing little momentum despite mixed economic signals.
September’s U.S. Nonfarm Payrolls report revealed a weaker-than-expected jobs market, with only 29K new jobs added, down from the previous month’s revised figure of 133K. The unemployment rate rose to 4.2%, while annual wage growth slowed to 3%. These figures have reduced pressure on the Federal Reserve to raise interest rates in October.
However, geopolitical tensions, including conflicts in the Middle East and between Russia and Ukraine, are boosting demand for the safe-haven U.S. Dollar, which is supporting the USD/JPY pair. Analysts at ABN Amro suggest that while an October Fed hike is less likely, they still anticipate one more rate increase by December to combat inflation.
From a technical perspective, USD/JPY remains in a constructive near-term trend as long as it stays above the 100-period Simple Moving Average at 156.72. Key support levels are noted at 156.40-156.35, while resistance could emerge around 158.00 and 158.40, with a potential retest of 159.00 if the pair breaks higher.