USD/JPY spikes and retreats on mixed US NFP report, up a little above 139.00 mark

• USD/JPY struggles to capitalize on its modest intraday gains and hands near a one-week low.
• The mixed NFP report reaffirms an imminent Fed rate hike pause and continues to cap the USD.
• The risk-on impulse undermines the safe-haven JPY and is seen lending some support to the pair.

The USD/JPY pair jumps to a fresh daily high, around the 139.45 region, during the early North American session, albeit meets with a fresh supply at higher levels. Spot prices quickly retreat to the lower end of the daily range and currently trade just above the 139.00 mark following the release of the mixed US monthly jobs data.

The US Dollar (USD) did get a minor boost in reaction to the upbeat headline NFP print, showing that the US economy added 339K new jobs in May. The reading consensus estimates pointing to an addition of 190K jobs and well above the previous month’s upwardly 294K, which, in turn, benefits the Greenback and provides a modest lift to the USD/JPY pair.

Further details of the report, however, revealed that the Unemployment Rate shot to 3.7%, missing expectations for a modest uptick to 3.5% from 3.4%. Moreover, Average Hourly Earnings also fall short of estimates, reaffirming market expectations that the Federal Reserve (Fed) will likely skip an interest rate hike in June. This, in turn, caps the buck and the USD/JPY pair.

The downside, meanwhile, remains cushioned, at least for the time being, amid a more dovish stance adopted by the Bank of Japan (BoJ). This, along with the risk-on impulse, as depicted by a generally positive tone around the equity markets, undermines the safe-haven Japanese Yen (JPY) and acts as a tailwind for the USD/JPY pair, warranting some caution for bearish traders.

Nevertheless, spot prices, for now, seem to have stalled this week's retracement slide from the 141.00 neighbourhood, or the YTD low, though remain on track to register losses for the first time in the previous four weeks.

Technical levels to watch