USD/JPY jumps above 143.00 after US data

The USD/JPY pair advances for a third day in a row, gaining 0.70% and moving up towards the 143.53 region, as at the time of writing. Although it accelerated in July, the ISM Manufacturing PMI fell short of expectations. Additionally, JOLTs statistics fall short of predictions.

Prior to important labour market statistics, the USD trades well against most of its competitors. Following the release of mid-tier economic data on Tuesday, the USD traded higher against the majority of its competitors, including the EUR, GBP, and JPY. On the other hand, the BoJ’s dovish attitude hasn’t stopped the JPY from weakening.

July’s PMI figure from the US’s Institute for Supply Management (ISM) came in at 46.4 vs the predicted 46.8, but it was higher than the previous figure of 46. The June JOLTs Job Openings, on the other hand, which records open positions, came in at 9.58M, versus the predicted 9.62M and the prior 9.82M.

It’s important to note that Fed Chairman Jerome Powell noted that the employment market is “tight” and that the economy is resilient, reiterating that choices in the future would depend on new information. As a result of market players’ bets on the outcome of the incoming economic numbers, the USD price dynamics will see volatility in the outcome of the economic data unit at the next September meeting.

ADP’s estimates of job employment change on Wednesday, the Jobless Claims report on Thursday, and the Nonfarm Payrolls (NFP) report on Friday will all be widely monitored.

Expectations for further tightening of monetary policy from the Federal Reserve are unchanged. Markets are presently pricing in a 20% possibility of a 25 bps hike in the September meeting and 29% odds of a 25 bps hike in November.

On the Japanese front, the JPY is losing ground versus other currencies as a result of the Bank of Japan’s (BoJ) dovish posture and limited flexibility in their Yield Control Curve (YCC). Due to the fact that inflation is still below expectations, the BoJ has no plans to normalize monetary policy. Other central banks with different economic policies, such as the Federal Reserve, European Central Bank, and Bank of England, could cause the Yen to drop even further.