USD/JPY extends losses to the 133.00 area amid a weaker dollar
04.08.2022, 15:20

USD/JPY extends losses to the 133.00 area amid a weaker dollar

  • US dollar losses momentum amid lower US yields.
  • After US Jobless Claims attention turns to Friday’s Non-farm payrolls.
  • USD/JPY fails again to break 134.50, and drops sharply.  

The USD/JPY dropped further after the beginning of the American session and printed a fresh daily low at 133.02. A weaker US dollar weighed on the pair.

US data on focus

Economic data released in the US on Thursday showed an increase in Continuing Claims to the highest level since March; while Initial Claims rose to 260K. The trade deficit narrowed to $99.5B in June, the lowest in five months.

On Friday, the US official employment report is due. Market consensus is for an increase in payrolls by 250K. “Data surprises have been strongly correlated with broad USD variation. An above-consensus print should leave a slightly firmer tone but would expect price action to be somewhat contained. EURUSD bias leans lower but should be contained above 1.01. USDJPY faces more topside extension risk on a break of 134.80/00”, explained analysts at TD Securities.

The dollar is falling modestly across the board on Thursday. The US 10-year yield stands at 2.67% and the 30-year at 2.96%. In Wall Street, the Dow Jones is falling by 0.27% and the Nasdaq 0.37%.

The combination of lower US yields and negative risk sentiment is favoring the yen. The Japanese currency is among the top performs. The USD/JPY is near the 133.00 zone a break lower could open the doors to more losses, with the next support at 132.70 followed by 132.20. On the upside, above 134.50 the dollar should strengthen.

Technical levels

 

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