Yen Surges as US Jobs Data Raises Rate Cut Expectations

The Japanese yen strengthened against the US dollar on Friday after the release of weaker-than-expected US employment data. The USD/JPY pair slipped to 151.20, down from 152.10 the previous session.

The US non-farm payrolls report showed an addition of only 120,000 jobs in April, missing the consensus estimate of 180,000. The unemployment rate ticked up to 4.1%, and average hourly earnings grew at a slower-than-expected pace of 0.2% month-over-month.

Market participants now assign a 68% probability to a rate cut at the September meeting, up from 55% a day earlier, according to the CME FedWatch tool. This shift in expectations weighed on the US dollar and provided a tailwind for the yen.