USD/JPY consolidates gains above 111.50 ahead of US NFP
- USD/JPY prints gains on the last trading day of the week.
- US Treasury bond yields push above 1.57% on job data optimism.
- US debt ceiling passage, better Initial Jobless Claims, and risk-on mood remain a central theme.
USD/JPY remains subdued in the early Asian session after posting solid gains in the overnight session. The pair confides in a very narrow trade band following 40-pips movements a day earlier. At the time of writing, USD/JPY is trading at 111.62, up 0.02% for the day.
The US benchmark 10-year Treasury yields edge higher near their four-month highs at 1.57% as odds of Fed’s tapering as soon as November remain solid as the US job market continues to show signs of recovery. The US Initial Jobless Claims fell unexpectedly 326K in the week ending October 2nd below the market expectations of 348K. The readings came a day later when ADP’s monthly report showed private jobs rose 568,000 in September.
The US Dollar Index (DXY), which tracks the performance of the greenback against six major currencies, trades near 94.20 below its one-week high ahead of the critical US Nonfarm payroll data. Meantime, the US Senate progress toward the passage of $28.4 trillion borrowing authority. Democratic Senate Majority Leader Chuck Schumer set for a four-debate on the bill that would raise the debt limit by $480 billion.
On the other hand, the Japanese yen lost its ground after the Bank of Japan cut its assessment for five of the country’s nine states on the supply-chain bottlenecks and a surge in COVID-19 cases. The general risk-on mood also dampens the sentiment surrounding the yen. It is worth noting that, S&P 500 Futures is trading at 4,393.50 with 0.07% gains.
As for now, traders are waiting for Japan’s Current Account data, US Nonfarm Payrolls, and Unemployment Rate to gauge the market sentiment.