USD/JPY retreats on uncertainty ahead of FOMC decision

Private hiring in the US increased more than expected, and the USD/JPY sawsawed before slipping. Despite a moderate hiring pace in April, the ISM Non-Manufacturing PMI rises. Traders pay close attention to Powell’s news conference and the US Federal Reserve decision.

In the midst of a mixed market climate caused by the Federal Reserve’s (Fed) impending monetary policy announcement, the USD/JPY fell for the second day in a row. This decline was caused by the decline in the yield on US 10-year Treasury bonds. As a result, US Treasury bond yields are decreasing, especially those on the 10-year, which directly ties to the USD/JPY pair. The USD/JPY exchange rate is currently trading at 135.27, down 0.90%.

Due to declining US bond yields and a risk-off environment, USD/JPY is under pressure. US stocks are changing in anticipation of the Fed’s decision. The unexpected increase in the US ADP Employment Change report, which shows how private hiring is progressing in the nation, exceeded predictions of 148K and March’s figures of 142K by 296K.

The ADP Research Institute survey also noted that although hiring increased, earnings decreased from 14.2% to 13.2%. Following the report, the USD/JPY veered off course and fell 60 pips towards the 135.40 region before continuing to lose ground.

Data recently revealed that the US ISM Non-Manufacturing PMI increased in April from 51.2 to 51.9. The data revealed that while hiring moderated, a measure of prices paid remained relatively stable at its lowest level.

Due to its Golden Week festivities, investors are instead focused on the US Dollar’s (USD) dynamics and market sentiment.

Prior to the session, the Federal Reserve would announce their choice, which would be followed by Chair Powell’s press conference, which USD/JPY traders often await in order to get clues.