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USD/JPY retreats from multi-decade highs after NFP

  • US economy adds 315K jobs in August, Unemployment rate rises to 3.7%.
  • USD/JPY pulls back amid a weaker US dollar after NFP.
  • Yen remains under great pressure, now on risk appetite.

The USD/JPY is falling modestly on Friday, after hitting earlier at 140.79, the best level since 1998. A weaker US Dollar over the board weighed on the pair following official US employment report.

US yields retreat sharply

Non-farm payrolls rose by 315K in August against expectations of a 300K increase. The unemployment rate rose unexpectedly from 3.5% to 3.7%, however, the labor participation rate also rose.

Following the report, US yields dropped sharply favoring the decline in USD/JPY. THE UNITED STATES 10-year yield fell to 3.17% and the 2-year fell from 3.52% to 3.40%. Simultaneously, equity prices in Wall Street rose. The Dow Jones was rising by 0.81% and the Nasdaq by 0.79%.JAPAN yen didn’t stage a broad-based recovery on the trunk of the improvement in risk sentiment.

Despite falling on Friday, USD/JPY is approximately to post the 3rd consecutive weekly gain and the best close since 1998. The divergence between your Bank of Japan and the Federal Reserves monetary policy continues to operate a vehicle the pair to the upside. At their next meeting, the BoJ is likely to keep carefully the ultra-expansive stance as the Fed sometimes appears raising rates by 50 or 75 basis points.

Technical levels

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