USD/JPY Plunges Over 2% as Weak US Jobs Data Bolsters Yen

The USD/JPY pair took a sharp nosedive on Friday, August 1, 2025, tumbling more than 2% from a high of 150.91 to a low of 147.28. Triggered by a disappointing US employment report, the slide saw the pair slip below critical technical levels, fueling a surge in safe-haven demand for the Japanese Yen. With US Treasury yields falling and market sentiment souring, the pair closed the week down 0.18%, trading near its weekly lows at 147.38.

The catalyst for this dramatic drop was the July Nonfarm Payrolls report, which revealed a paltry addition of jobs, far below market expectations. This weak data, coupled with significant downward revisions to prior months, underscored a faltering US economy, prompting investors to seek refuge in the Yen. The USD/JPY’s decline was exacerbated by declining Treasury yields, which further eroded the dollar’s appeal against its low-yielding Japanese counterpart.

From a technical perspective, the pair’s downward spiral smashed through the 200-day Simple Moving Average (SMA) at 149.49, a key support level, before breaching the July 31 low of 148.58. Sellers then drove the pair past the 20-day SMA at 147.69, cementing its fall below the critical 147.50 mark. The Relative Strength Index (RSI) signaled a slight bearish tilt, suggesting momentum may continue to favor the Yen in the near term. The next significant support lies at 145.71, where the 50- and 100-day SMAs converge, setting the stage for potential further declines.

As markets grapple with heightened uncertainty, the USD/JPY’s sharp retreat highlights the Yen’s resilience amid global economic jitters. Traders now await further cues from US data and Federal Reserve signals to gauge the pair’s next move.