USD/JPY impacted by US dollar’s weakness following NFP data

US Nonfarm Payrolls data for December weakened the US Dollar, even though the labour market remains tight. Average Hourly Earnings easing sparked speculations for a dovish move of the Federal Reserve in the February meeting.

The USD/JPY pair has remained downward biased below 133.00. The pair also struggles at the 200-day Exponential Moving Average (EMA) around 134.82, dropping below the 134.00 mark, after US economic data, although positive, weighed on the dollar, exacerbating a fall of 100 pips in the major.

At the time of writing, the USD/JPY pair is trading at 132.41, below its opening price by 0.44%.

US Unemployment Rate fell to 3.5% YoY, against estimates of 3.7%, while Average hourly earnings rose 4.6%, below the market consensus of 5.0%, welcomed news for Fed officials, who see wage pressures as a hurdle to tackle inflation.

Fed’s Watcher Nick Timiraos Tweeted that “revisions to average hourly earnings data paint a marginally less worrisome picture for the Fed on wages than the Nov report.”

The US Dollar Index fell below the 105.000 mark, spurred by that Tweet, at 104.963. the index later recovered some ground, above 105.000 before reversing its trend, and turned negative at around 104.682, down by 0.46%.