USD/JPY Drops as U.S. Job Fears Grow

On July 1, 2025, the USD/JPY pair fell to 143.89, down from 144.62, as the U.S. dollar weakened amid fears of dismal U.S. employment data. The pair ranged from a daily high of 144.04 to a low of 143.77, signaling market jitters. Forecasts suggest June’s non-farm payrolls will drop to 115,000 from 139,000, with unemployment rising to 4.3% from 4.2%. This data, pivotal before the Federal Reserve’s July meeting, could pressure Chair Jerome Powell into hastening rate cuts. Will the dollar’s slide deepen?

Yields Drag Dollar Down

U.S. Treasury yields fell as markets anticipated at least two rate cuts by year-end, dimming the dollar’s appeal. This yield drop hit USD/JPY, reducing its draw for carry traders. For example, a Tokyo-based trader might pause dollar investments, cautious of a weakening U.S. labor market.

Market Ripples

A disappointing jobs report could signal economic slowdown, further denting the dollar. In 2023, similar weak data triggered a 2% USD/JPY decline, hinting at potential turbulence ahead.

Looking Ahead

If jobs data underperforms, USD/JPY may test 143.00. A stronger report could steady the pair near 144.50. Powell’s next steps will shape the dollar’s trajectory in this uncertain climate.