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USD/JPY Surges To 135.00 On a Positive NFP Report, But Buyers Do Not Follow Through
USD/JPY obtains significant positive momentum on Friday and is supported by a number of factors. The positive US NFP report gives the USD a moderate boost and functions as a tailwind for the major. A favorable risk sentiment weakens the safe-haven JPY and provides additional support for the pair.
The USD/JPY pair receives aggressive offers during the early North American session and surges to the 135.00 psychological level in response to the outstanding US employment report for the previous month.
In actuality, the headline NFP figure revealed that the US economy added 253K new employment in April as opposed to the 179K expected, offsetting the downwardly revised figure of 165K. In addition, the unemployment rate unexpectedly declined to 3.4% during the reported month from 3.5% in March, which helps the US Dollar (USD) regain significant positive momentum and provides a decent boost to the USD/JPY exchange rate.
In addition, a positive reversal in global risk sentiment, as illustrated by a decent recovery in the equity markets, weakens the safe-haven Japanese Yen (JPY) and adds to the bullish sentiment encircling the USD/JPY pair. In spite of this, the Federal Reserve's (Fed) less hawkish posture discourages USD bulls from placing aggressive bets and caps any further gains, at least for the time being.
Nevertheless, the USD/JPY pair appears to have halted this week's sharp retracement decline from the 137.75-137.80 region, or the two-month high, for the time being. However, spot prices remain on course to decline for the first time in the previous four weeks. This makes it prudent to wait for robust follow-through buying before placing fresh bullish wagers on the major before placing fresh bullish wagers.
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