USD/JPY weakens below 157.50 as intervention fears offset strong US jobs growth
The USD/JPY pair trades in negative territory near 157.40 during the early Asian session on Friday. The Japanese Yen (JPY) strengthens against the US Dollar (USD) amid intervention fears. The preliminary reading of the US S&P Global Purchasing Managers Index (PMI) will be in the spotlight later on Friday.
Data released by the US Bureau of Labor Statistics (BLS) on Thursday showed that Nonfarm Payrolls (NFP) in the United States (US) rose by 119,000 in September, compared to the 4,000 decrease (revised from +22,000) recorded in August. This figure surpassed the market expectation of 50,000.
Meanwhile, the Unemployment Rate ticked up to 4.4% in September from 4.3% in August. The Average Hourly Earnings held steady at 3.8% YoY, compared to the market expectation of 3.7%.
This report showed signs of faster US job growth in September, suggesting the US Federal Reserve (Fed) is likely to pause cutting interest rates in December. This, in turn, could provide some support to the Greenback against the JPY. Fed funds futures are now pricing in nearly a 39% chance of a 25 basis points (bps) reduction at the Fed's December meeting, according to the CME Group's FedWatch tool.
On the other hand, some verbal intervention from Japanese authorities could underpin the JPY and create a headwind for the pair. Japan's Chief Cabinet Secretary Minoru Kihara said on Thursday that the recent FX moves are sharp and one-sided and that he is watching the FX market move with a high sense of urgency. Kihara further stated that the FX market needs to move stably, reflecting fundamentals.
Source: Fxstreet
