Softer US jobs data and suspected Japanese FX intervention drive USD/JPY down 1.6% to 161.28, easing Fed rate hike expectations.
The Japanese Yen surged against the US Dollar, with USD/JPY falling from 162.83 to 161.28 after US non-farm payrolls rose by just 57k in July, missing forecasts of 113k. Suspected intervention by Japanese authorities amplified the move, pushing the pair sharply lower.
The weaker-than-expected jobs report reduces near-term odds of a Federal Reserve rate hike but leaves broader labor market and inflation trends unclear. Downward revisions to prior months’ data added to the cautious outlook, while upcoming US inflation prints will likely take center stage for Fed policy.
Market focus remains on potential further FX intervention by Japan, with thin liquidity ahead of US holidays keeping USD/JPY under pressure. Analysts warn volatility may persist as traders weigh inflation risks against softer economic data.