At 149.50, USD/JPY Reclaims a Three-Day High On Optimistic US Labour Demand

The USD/JPY pair reaches a three-day high of 149.50 following the publication of the United States Nonfarm Payrolls (NFP) report, which exceeded expectations. The asset appreciates on expectations that robust labour market conditions will provide a hawkish undertone for the November monetary policy meeting of the Federal Reserve (Fed).

According to the US NFP report, employers in the United States hired 336K people in September, which was significantly higher than the 170K and 227K estimates from August. Unchanged from 3.7% to 3.8%, the Unemployment Rate fell slightly short of expectations at 3.8%.

In the realm of wages, average hourly wages increased by 0.2% per month on a steady basis, whereas investors had anticipated a 0.3% increase. The annualised wage data decreased marginally from the previous release of 4.3% and the consensus estimate to 4.2%.

The US Dollar Index (DXY) rises to approximately 107.00 as optimistic US labour market data heightens anticipations of an additional interest rate hike by the Federal Reserve. Ten-year US Treasury yields increased to approximately 4.84%. Loretta Mester, president of the Federal Reserve Bank, predicted this week that interest rates will increase once more in November if the current economic climate persists. Interest rates set by the Fed might not change in the event that labour demand weakens.

The appeal of the Japanese Yen has been affected by the clarification from Bank of Japan (BoJ) money market data that Tuesday's flash collapse was not the result of central bank intervention in the FX domain. As everything has once again returned to normal, investors continue to anticipate the BoJ's covert intervention.