USD/JPY slips to near 138.50 on the upbeat Japan Employment data

• USD/JPY has witnessed a sell-off and has dragged to near 138.50 on stable Japan’s jobless rate.
• Japan’s Jobs-to-Applications ratio has improved to 1.29 vs. 1.27 recorded earlier.
• The Fed’s agenda of scaling down the inflation rate has challenged growth prospects.

The USD/JPY pair is witnessing a steep fall after the release of Japanese employment data. The asset has given a downside break of the consolidation formed in a 138.62-138.85 range. The major is declining firmly towards 138.27 and may display more losses if it violates the crucial support.

The Statistics Bureau of Japan has reported the Unemployment Rate has remained unchanged at 2.6%. While the Jobs/Applications ratio has improved significantly to 1.29 against the estimates and the prior release of 1.27. There is no denying the fact that the employment data has remained upbeat, however, and also the yen bulls are capitalizing on the same.

Meanwhile, the US dollar index (DXY) has turned into a correction mode after printing a fresh two-decade high at 109.40 on Monday. Earlier, the asset remained in the grip of bulls after Federal Reserve (Fed) chair Jerome Powell preferred a hawkish stance on guidance over interest rates despite declining US economic activities.

Fed’s commentary at the Jackson Hole Economic Symposium indicated that investors should brace for the continuation of the advancing interest rate cycle as bringing price stability to the economy is the foremost priority. The inflation rate is currently at 8.5% and households are facing the headwinds of higher payouts for similar quantities purchased by them on a recurring basis. Therefore, the US economic activities are required to maintain patience for recovery.