USD\/JPY traded near 153.30 on Thursday, down 0.70% on the day. It rose briefly after the US jobs report, then fell again as the Japanese Yen strengthened.<\/p>\n
US Nonfarm Payrolls rose by 130,000 in January versus 70,000 expected, after a downwardly revised 48,000 increase in December. The unemployment rate eased to 4.3% from 4.4%, participation rose to 62.5%, and average hourly earnings increased 0.4% m\/m while holding at 3.7% y\/y versus 3.6% expected.<\/p>\n
The data supports the Fed keeping rates in the 3.50%\u20133.75% range. CME FedWatch shows markets almost fully pricing a pause in March and April.<\/p>\n
Attention also turned to revisions, including an 898,000 reduction in the March 2025 employment level and a cut to total 2025 job growth to 181,000 from 584,000. These revisions reduced support for the US Dollar.<\/p>\n
The Yen gained after Prime Minister Sanae Takaichi won Sunday\u2019s election. Markets expect this outcome to help pro-growth measures and allow gradual BoJ policy adjustment, with medium-term tightening speculation supporting the Yen.<\/p>\n
The headline jobs number from last week is proving to be misleading. We are now focused on the massive 898,000 downward revision to the 2025 employment level, which paints a much weaker picture of the US economy. This fundamental shift limits the Federal Reserve’s ability to maintain a hawkish stance in the coming months.<\/p>\n
This view is strengthened by the US Consumer Price Index (CPI) report released yesterday morning, which showed core inflation fell to 2.8% year-over-year, missing expectations of 3.0%. This reinforces our belief that the Fed will remain on hold, with Fed fund futures now implying a 40% chance of a rate cut by July. The weak underlying trend in both jobs and inflation makes it difficult to be bullish on the US Dollar.<\/p>\n
On the other side of the trade, the Japanese Yen’s momentum is building after Prime Minister Takaichi\u2019s decisive election win. Comments this week from the new Finance Minister hinting at a desire to “normalize policy” are fueling speculation that the Bank of Japan could abandon its negative interest rate policy as soon as its April meeting. We are seeing a significant unwinding of short JPY positions, a dynamic we last saw during the sharp yen rally in mid-2025.<\/p>\n
Given this policy divergence, we should be positioning for a further drop in USD\/JPY, targeting a move toward the 150.00 psychological level. Buying March and April put options offers a defined-risk way to capitalize on this expected downside. The rise in one-month implied volatility to 12.5% indicates the broader market is also preparing for a significant move, so establishing these positions promptly is advisable.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" USD\/JPY dips near 153.30 as strong payrolls fade; US revisions weaken dollar, election boosts yen.<\/p>\n","protected":false},"author":62,"featured_media":17054,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-41611","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41611","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=41611"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/41611\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17054"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=41611"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=41611"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=41611"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}