USD/JPY falls 0.92% on Thursday and trades around 161.05 at the time of writing after a much weaker-than-expected US employment report weighs on the US Dollar (USD).
Data released by the Bureau of Labor Statistics (BLS) showed that Nonfarm Payrolls (NFP) increased by only 57K in June, compared with market expectations of 110K
May’s reading was revised lower to 129K from 172K previously, while April’s figure was revised down to 148K from 179K, resulting in a combined downward revision of 74K jobs. The report nevertheless offered more mixed signals. The Unemployment Rate unexpectedly declined to 4.2% from 4.3%, while the Labor Force Participation Rate fell to 61.5% from 61.8%.
Meanwhile, annual wage growth, as measured by Average Hourly Earnings, accelerated slightly to 3.5%, in line with market expectations. Markets are nevertheless focusing on the weak headline payroll figures, reinforcing expectations that the Federal Reserve (Fed) could adopt a less hawkish monetary policy throughout the year. This weighs on the US Dollar, contributing to USD/JPY’s decline.