Weaker-than-expected US initial jobless claims data supports the dollar, easing pressure on the Federal Reserve to cut rates soon.
The dollar extended gains against the yen, with USD/JPY climbing to 158.20 as US initial jobless claims fell to 199K, below the 202K consensus. The print marked a fourth straight session of yen weakness, eroding last week’s intervention-driven rebound.
Claims remained near the prior week’s 198K, while Challenger job cuts dropped to 33.429K in July from 45.849K, signaling a labor market cooling through reduced hiring rather than rising layoffs. Attention now shifts to Friday’s Nonfarm Payrolls report, where economists expect an 80K gain in July after June’s 57K.
Fed Governor Lisa Cook’s recent hawkish remarks on inflation have amplified focus on wage growth, with average hourly earnings forecast to hold at 0.3% month-over-month and 3.5% year-over-year.