USD/JPY risks finely balanced ahead of payrolls
Sept 5 (Reuters) -The action in G10 FX remains largely centered around the Japanese yen, which appears to be the cleanest way to trade the latest U.S. dynamics. Consequently, with markets reacting to incoming U.S. data, USD/JPY has seen yet another choppy session, dropping to a low of 142.86 after a soft ADP report, before reclaiming 144 on the back of a robust ISM services PMI print.
In any case, the narrative is unchanged, it all comes down to Friday’s payrolls data, which should determine whether the Fed’s cuts 25 or 50bps at the September meeting
While ADP was notably weaker at 99k, compared the street estimate of 145k, as has been covered at length previously, the link between ADP and NFP is tenuous at best. The average deviation between the two data points in the last two years is 63k. Though, while traders may slightly lean in favor of a softer NFP report, the risks remain finely balanced.
There is clearly enough appetite to sell dollars in the event of a weak jobs report, opening the door to a 140 test in USD/JPY. Meanwhile, we could just as easily retest the weekly high at 147.20 on the back of an upside surprise.
It is also noteworthy that Fed rate-setter Christopher Waller will be speaking after the payrolls data on Friday. With Waller's comments coming just before the pre-meeting blackout period, anything he says on the data, the economy or policy could set the tone for the FOMC meeting.
For more click on FXBUZ
USDJPY short term data reaction https://tmsnrt.rs/4gaJoRv
(Justin McQueen is a Reuters market analyst. The views expressed are his own.)
</body></html>Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
