USD/JPY climbed to 158.30 as a strong US jobs report bolstered the Dollar, though concerns over potential Japanese currency intervention and cooling US inflation expectations capped further gains.
The NFP beat (165K vs 65K) plus unemployment dropping to 4.1% reinforced a hawkish Fed outlook with a December hike on the table. DXY recovered from a five-week low near 101.20 to around 102.15. Softer University of Michigan inflation expectations (4.3% vs 4.7%) limited the move.
A much stronger-than-expected US jobs report with 165K hires versus 65K expected, which reduced expectations that the Fed will ease up on fighting inflation.
Preliminary University of Michigan data showed one-year consumer inflation expectations dropping to 4.3% in November from 4.7%.
October NFP came in at 165K jobs vs 65K expected, unemployment fell to 4.1% and wage growth beat, keeping a December Fed rate hike in play and widening USD-JPY yield differentials. USD/JPY rebounded from 157.26 to around 158.30. Japanese intervention risk after the slide below 154.00 caps aggressive upside.
The US jobs report showed 165K new jobs against a 65K forecast, making a December Fed rate hike more likely and boosting the Dollar's yield advantage over the Yen.
Traders are wary of Japanese intervention after the pair earlier slid below 154.00, and softer US inflation expectations limited the Dollar's gains.
Strong jobs data (165K vs 65K) and a December hike remaining in play pushed the benchmark 10-year yield up 4 basis points to 4.88%, widening the gap over Japan to around 225 bps. Softer US inflation expectations could temper further rises.
It rose 4 basis points to 4.88% as the strong labour market data supported expectations of a December Fed rate hike.
Investors bought JGBs amid an AI-led equity sell-off, pushing Japan's benchmark 10-year yield to around 2.63%, near a four-month low and down more than 4% on the day. This widened the yield gap with the US to around 225 bps, weighing on the Yen.
Investors bought Japanese Government Bonds as a safe haven during an AI-led equity sell-off, driving the 10-year yield to around 2.63%, near a four-month low.
The US Dollar rallied against the Japanese Yen on Friday after October nonfarm payrolls surged to 165,000, significantly beating the 65,000 forecast. This robust labor market data, combined with a decline in unemployment to 4.1%, reinforces the likelihood of a December Federal Reserve rate hike and widens the yield spread between US and Japanese bonds.
The US jobs report showed 165K new jobs against a 65K forecast, making a December Fed rate hike more likely and boosting the Dollar's yield advantage over the Yen.
Traders are wary of Japanese intervention after the pair earlier slid below 154.00, and softer US inflation expectations limited the Dollar's gains.