After moving sideways for hours, the USD/JPY broke to the downside, hitting fresh weekly lows following the release of the US ADP Employment report. The pair is testing the 131.00 area amid a weaker US dollar.
The report published by Automatic Data Processing (ADP) showed that in March the private sector added 145,000 jobs, below expectations of a 200,000 increase. February’s figures were revised higher from 242,000 to 261,000. On Friday, the Nonfarm Payrolls report is due. Later on Thursday, at 14:00 GMT, the March ISM Service PMI Index will be released.
US yields accelerated the decline after the ADP report, boosting the Japanese Yen across the board. The US 10-year yield fell to 3.30%, and is about to test March lows. The 2-year Treasury yield was at 3.89% and bottomed at 3.75%. The US Dollar Index erased daily gains and fell from 101.70 to 101.50. On Tuesday, the DXY posted the lowest daily close since early February.
The USD/JPY bottomed at 130.97, hitting the lowest level since March 29. As of writing, it is testing the 131.00 zone. A consolidation below would suggest more losses ahead, targeting the next strong support seen at 130.50/60. On the upside, the key resistance is 131.80.
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