Against the backdrop of tonight's U.S. jobs report, PPI and CPI releases and a speech by a BOJ Policy Board member, the outlook considers whether USD/JPY could fall below ¥155 or recover toward ¥157. It also reviews current levels and the factors ahead.
USD/JPY is in focus in tonight's foreign exchange market ahead of the U.S. jobs report and inflation data. With expectations of a BOJ rate hike still simmering, USD/JPY fell temporarily to around ¥155.29 in the Tokyo market before recovering to the ¥156.40 range on dip-buying. In overseas markets, a recovery toward ¥157 is expected.
The market expects tonight's U.S. August jobs report to show a 55,000 increase in nonfarm payrolls from the previous month and an unemployment rate of 4.1%. Average hourly earnings are expected to rise 0.3% month on month and 3.1% year on year. If the data show a resilient labor market, expectations of a rate hike could strengthen, potentially putting renewed upward pressure on USD/JPY. Conversely, evidence of a slowing labor market could bring support around the lower ¥155 range into focus.
Next week's events include Japan's total cash earnings and trade balance, the U.S. producer price index and consumer price index, and speeches related to the Federal Reserve. USD/JPY could shift direction depending on the factors ahead.
On the USD/JPY 15-minute chart, the market is expected to remain focused on identifying the current range and directional bias, with events marked by a star listed as key factors to watch.