USD Supported by Strong Jobs Data as USD/JPY Tests Key Support Levels

The US dollar found support after stronger than expected jobs data, with payrolls, wages, and unemployment all beating forecasts. This reduces near term pressure for Fed rate cuts compared to earlier expectations that increased after soft retail sales and falling yields.

The Japanese yen has been strong recently due to lower US yields and reduced political uncertainty after Japan’s election, but stronger US data may slow that strength and help stabilise USD/JPY after its recent drop of about 1.8% this week.

Technically, USD/JPY had turned bearish, similar to the January sell-off, with price testing key support near 154.34 (December low) and 153.9. With stronger NFP, the pair may try to bounce from this area, although upside may stay limited unless higher resistance levels are reclaimed. Moves toward 155 may still attract sellers, but stronger US data raises the risk of a short-term move higher before direction becomes clearer.

USD/JPY Daily Chart