The consecutive signals indicating that the Bank of Japan is determined to change its accommodative policy and abandon negative interest rates have allowed the Japanese yen to achieve strong gains. In the case of the USD/JPY currency pair, it plummeted to the support level of 146.40 at the time of writing, near its lowest level in three months. For three consecutive weeks, the USD/JPY has been subjected to profit-taking selloffs since testing the resistance level of 151.90, its highest in over a year, in the middle of last month. Furthermore, with the Japanese shift in future language tightening the policy of the Bank of Japan, the Japanese yen found an opportunity to compensate for those sharp losses.
On the economic side, employment rates in the US private sector rose less than expected in November, as the payroll processing company ADP revealed in a special report. Also, it added that employment in the US private sector rose by 103,000 jobs in November after rising by a downwardly revised 106,000 jobs in October. Moreover, the economists expected US employment in the private sector to rise by 130,000 jobs compared to the addition of 113,000 jobs announced in the previous month. Commenting on the results, Nila Richardson, chief economist at ADP, said: “Restaurants and hotels were the largest job creators during the post-pandemic recovery period.” “But this reinforcement is behind us.” She added, “The return to trend in leisure and hospitality indicates that the US economy as a whole will see more moderate employment and wage growth in 2024.”
Meanwhile, U.S. employment in the services sector may have risen by 117,000 jobs in November, with a decline in employment in the entertainment and hospitality sector limiting the upward trend. Nearby, the report said employment in the goods-producing sector fell by 14,000 jobs, reflecting a modest decline in employment in the manufacturing and construction industries.
Also, ADP said that unemployed workers saw a wage increase of 5.6% in November, the slowest growth pace since September 2021. simiWage growth for workers in the job-changing sector slowed to 8.3%, representing the lowest year-over-year increase since June 2021. The U.S. Department of Labor is scheduled to release its closely watched employment report for the month of November on Friday. Economists currently expect nonfarm payroll employment to rise by 185,000 jobs in November after rising by 150,000 jobs in October, while the unemployment rate is expected to remain at 3.9%.
USD/JPY Technical analysis and Expectations Today:
According to the performance on the daily chart below, the price of the USD/JPY currency pair is witnessing a downward shift in the general trend. Meanwhile, the Breaking of support at 145.80 will confirm this shift, and at the same time the technical indicators will begin to give oversold signals. On the other hand, over the same period, bulls will not regain stronger control over the trend without returning to the resistance levels of 148.50 and 15.00, respectively. Furthermore, the future performance of USD/JPY depends on the reaction to the announcement of US jobs numbers tomorrow. Also, it depends on the future policies of both the Central Bank of Japan and the US Federal Reserve.
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