- The Japanese Yen (JPY) fell for a second day on Friday
- Losses could be limited owing to BoJ rate hike expectations
- The US Dollar (USD rose against its major peers
- US NFP saw 139k jobs added vs 130k forecast
The US dollar against the Japanese yen (USD/JPY) exchange rate rose on Friday for a second straight day. The pair rose 0.55% in the previous session, settling on Thursday at 143.55. At 21:30 UTC, USD/JPY is +0.92 % lower at 144.87 and in a range of 143.38 to 145.10. The pair rose 0.56% across the week.
The yen fell on Friday amid an improving mood, although any downside appears limited, given expectations that the BoJ will continue hiking rates.
More hawkish BoJ expectations mark a divergence from bets from the Federal Reserve, which is expected to cut interest rates in 2025.
According to Nomura Holdings investment bank, the yen could gain 6% against the dollar in the coming months, owing to expectations surrounding a steady pace of rate hikes from the BoJ and with implicit pressure from Washington over the exchange rate during trade talks.
The US Dollar rose across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is 0.45% higher at 99.19 at the time of writing, after gains yesterday. The USD fell 0.14% across the week.
The U.S. dollar jumped on Friday afternoon as US non-farm payrolls came in more or less in line with estimates. May’s headline job creation was 139,000. This marked the lowest level since February, and was slightly ahead of the 130,000 expected. However, there was a total downward revision of 95k jobs in the previous two months, which could be a sign of weakness in the labour market.
However, unemployment remained unchanged at 4.2% in line with forecasts, and wage growth was stronger than expected at 0.4% month on month, up from 0.2% ad ahead of forecasts of 0.3%.
The data reinforce the Federal Reserve’s wait-and-see approach to monetary policy. The Fed has not taken action on rate cuts this year and is not expected to do so at the June meeting.
