05 Agosto 2024, USD/JPY
Event to pay attention to today:
17:00 GMT+3. USD - ISM Services PMI
USDJPY:
The USD/JPY pair is attracting some sellers near 145.20 during Asian trading on Monday. The decline in the value of the US dollar (USD) following the release of US employment data is contributing to a downward movement in the pair. On Monday, market participants will be monitoring the ISM Services Purchasing Managers' Index (PMI), which is projected to increase from 48.8 in June to 51.0 in July.
The US dollar remains under pressure as the US labour market continues to deteriorate in July. The Non-Farm Payrolls (NFP) data revealed that the US economy generated 114,000 jobs in July, a figure that was below market expectations of 175,000 growth and represented a downward revision from the 179,000 jobs added in June. The unemployment rate increased to 4.3%, representing the highest level since late 2021 and exceeding the market consensus forecast of 4.1%. The average hourly earnings figure showed a 0.2% increase on a month-on-month basis, which is below the market consensus forecast of 0.3%.
Conversely, rising geopolitical tensions in the Middle East may favour safe-haven currencies such as the Japanese Yen (JPY). On Sunday, US Secretary of State Tony Blinken informed his G7 counterparts that an attack by Iran and Hezbollah on Israel could commence as early as Monday, according to three sources with knowledge of the conversation who spoke to Axios.
Furthermore, the prospect of the Bank of Japan (BoJ) tightening monetary policy and the termination of asset deals may provide support for the yen in the near term. NBC FX analysts Stéphane Marion and Kyle Dames observed that the current surge in strength can be attributed to two factors. Initially, the cancellation of asset deals led to a surge, which was then further exacerbated by the BoJ's unexpected decision to raise rates to the highest level in 15 years. Additionally, the central bank indicated a shift towards a slower pace of asset purchases, marking a notable change in stance from the previous policy of providing "easy money".
Trade recommendation: Trading mainly by Sell orders from the current price level.
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