USD/JPY climbs back after tumbling during the previous trading session

The USD/JPY pair is recovering after a steep decline on Thursday, climbing four-tenths of a percent from the day’s opening bids and looking to pare back losses. The pair is up aroung 144.836, by +0.52% at the time of writing.

The US dollar traded flat against the Japanese Yen through the early half of the trading week before getting knocked back after the Yen caught a broad-market rally on the back of unusually hawkish comments from Bank of Japan (BoJ) Governor Kazuo Ueda.

On Friday, the Greenback tries to claw back chart paper, rising back into the 145.00 handle after a brief dip back into 142.50 at the start of the final trading session of the week. US Nonfarm Payrolls (NFP) broadly beat the street on Friday, posting a net gain of 199K jobs through November versus the forecast 180K and climbing over October’s net jobs gain of 150K. Broader markets have been ramping up bets of an accelerated path towards rate cuts from the Federal Reserve (Fed), with many market participants expecting the first rate cut from the Fed by as early as next March.

Despite the Dollar-positive NFP release, the USD/JPY remains deep in the red for the trading week after the Yen surged in one of its single best trading days in 13 months, fueled by speculation that the BoJ could finally be ending its negative rate regime as the Japanese central bank moves towards tighter monetary policy.

The US Dollar recovered some ground and continues to see a moderate climb heading into the Friday market close, but still remains well off the week’s high bids. Next week will be another Fed watch scenario, with the Federal Reserve delivering their last rate call of 2023 and an update to the Fed’s ‘dot plot’.