USD/JPY refreshes session tops, around 107.70 region after NFP

The USD/JPY pair edged higher during the early North American session and refreshed daily tops, around the 107.70 region post-US monthly jobs report.  |  02/07/2020 13:11
  • USD/JPY gains some positive traction on Thursday amid the prevalent risk-on mood.
  • Stellar NFP report provided an additional boost to the already stronger risk sentiment.
  • A solid pickup in the US bond yields remained supportive; weaker USD might cap gains.

The USD/JPY pair edged higher during the early North American session and refreshed daily tops, around the 107.70 region post-US monthly jobs report.

According to the data published by the US Bureau of Labor Statistics, the US Nonfarm-Payrolls (NFP) increased by 4.8 million in June as compared to gains of 3 million expected. Adding to this, the previous month's reading was revised upward to 2.699 million as against 2.509 million reported earlier. Further details revealed that the unemployment rate fell to 11.1% from 13.3% in May.

The stronger-than-expected US employment details offered further evidence that the worse of the coronavirus pandemic was probably over. This, coupled with positive results from the early-stage human trials of a potential Covid-19 vaccine, remained supportive of the upbeat market mood, which undermined the safe-haven Japanese yen and extended some support to the USD/JPY pair.

Bulls further took cues from a sharp intraday positive turnaround in the US Treasury bond yields. Meanwhile, the US dollar struggled to attract any meaningful buying, instead, it lost some additional ground following the release of solid economic data and might turn out to be the only factor capping any strong gains for the USD/JPY pair, at least for the time being.

Nevertheless, the pair has managed to recover a part of the previous day's corrective fall from three-week tops and now seems poised to aim back to Tuesday's daily closing high resistance near the 107.90 region. A subsequent positive move will set the stage for an extension of the USD/JPY pair's recent recovery move from the 106.00 neighbourhood.

Technical levels to watch

 

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