USD/JPY Soars to Multi-Week Highs on Strong U.S. Dollar and Labor Data
The USD/JPY pair experienced a significant rally in Thursday’s trading session, ascending to multi-week highs at 147.70 with a robust 1% gain. This surge was driven by a strong U.S. Dollar, buoyed by impressive labor market data, showcasing the American economy’s resilience. The easing of dovish Federal Reserve bets, while still substantial, contributed to this momentum.
US labor market data from the Department of Labor and ADP further bolstered the Greenback. Initial Jobless Claims dropped notably to 202K, surpassing expectations and highlighting a strengthening labor market. Similarly, December’s ADP Employment Change outperformed forecasts with a 164K increase in jobs, indicating robust economic activity.
Despite this, the market’s anticipation of Federal Reserve rate cuts remains. Key economic releases on Friday, including Nonfarm Payrolls, the Unemployment Rate, and Average Hourly Earnings, are poised to influence the short-term trajectory of the USD/JPY pair. The CME FedWatch Tool indicates high but eased expectations for rate cuts in the coming months, with a January hold widely anticipated.
USD/JPY Technical Outlook
From a technical perspective, USD/JPY’s bullish trend is underpinned by its successful breach of the 144.90 level, suggesting potential for further gains. However, Stochastic indicators hint at possible sideways movement due to current negativity, with a key support base at 142.35 to watch for. Today’s expected trading range is between 144.00 support and 145.90 resistance, maintaining a bullish outlook for the session.
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