The USD/JPY Consolidates Below 140.00, With The Downside Favored Ahead Of US Employment Data

In the Tokyo session, the USD/JPY pair is displaying a back-and-forth pattern below 140.00. As the upside in the USD Index appears limited until the release of United States Employment data, it is anticipated that the asset will extend its decline.

After a flat Tuesday, S&P500 futures are indicating modest gains in the Asian session. As investors await the release of full-fledged US labor market data, the overall market sentiment appears calm.

The upside for the USD Index is impeded by optimism regarding the simple passage of the new Republican-approved US debt-ceiling proposal. As reported by Reuters, late Tuesday evening, House of Representatives Kevin McCarthy urged Republican members to support a bipartisan agreement to raise the $31.4 trillion U.S. debt ceiling, labeling it the most conservative agreement ever.

The US Employment data will remain in the spotlight moving forward. It is anticipated that Wednesday's JOLTS Job Openings will be 9.375M, down from the previous release of 9.59M. A decrease in employment openings would indicate a decline in labor demand. This could be the result of US regional banks' restrictive credit conditions and the Federal Reserve's (Fed) decision to raise interest rates, which has dimmed the economic outlook. Thursday evening will see the publication of US Automatic Data Processing (ADP) Employment data, which is expected to show a decrease from the previous increase of 296K to 170K.

On the front of the Japanese Yen, Japan's monthly Retail Trade (April) contracted by 2.3%, whereas the market was expecting a flat performance. Annual Retail Trade data increased by 5.0% at a lesser rate than anticipated at 7.0% and than the previous release at 7.2%. This may put some pressure on the Bank of Japan (BoJ), as feeble retail demand may reduce inflationary pressures. Governor of the Bank of Japan Kazuo Ueda is focused on maintaining inflation above 2%.