USD/JPY jumps toward 113.40 after NFP amid a stronger dollar
04.02.2022, 14:42

USD/JPY jumps toward 113.40 after NFP amid a stronger dollar

  • US dollar strengthens after a better-than-expected NFP.
  • USD/JPY erases weekly losses with the latest rally.

The USD/JPY jumped from 114.90 to 115.38 following the release of the US employment report that showed better-than-expected numbers. The pair hit the highest level since Monday and it is holding above 115.00, with the bullish momentum intact.

After the ADP report and other labor indicators, the 150K increase in payrolls faced downside risk. The numbers came in the other way with a positive surprise. The number below consensus was the unemployment rate, which rose from 3.9% to 4%, but it was due to an increase in the labor participation from 61.9% to 62.2%.

“The Omicron wave has depressed economic activity, and this was meant to translate into weak hiring. It hasn't. 467k jobs created and massive upward revisions suggest a fundamentally very strong economy. With companies desperate to hire and the biggest issue being the lack of suitable staff, wages are rising sharply, and the Fed will respond”, says analysts from ING.

The numbers triggered a rally of the US dollar across the board and a sharp increase in US yields that weakened the Japanese yen. The US 10-year yield climbed to 1.91%, the highest since January 2020 and the 30-year reach 2.20%.

The post NFP rally put the USD/JPY on its way to the second daily gain in a row. The next resistance could be seen at 115.45, before last week highs at 115.65/70. Now the 115.00 zone has become the immediate support, followed by 114.78.  

Technical levels

 

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