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USD/JPY dynamics amidst US labor market and inflation data


usdjpy analysis, forex trading

In the first half of February of this year, newly released data concerning the state of the American labor market and the trajectory of consumer price increases in the USA have precipitated a notable reassessment of expectations regarding the Federal Reserve's forthcoming actions.


It's noteworthy to highlight that the alteration in nonfarm payrolls (NFP) during January 2024 amounted to a remarkable 353,000 positions, surpassing expectations by nearly twofold (initially projected at 187,000).


This substantial surge in employment levels resulted in the unemployment rate holding steady at 3.7 percent, defying market anticipations that it would rise to 3.8 percent.



Nonetheless, economists maintain that the favorable inflationary narrative in the USA is likely to persist. They harbor doubts about the probability of any further significant downturn in expectations concerning Federal Reserve interest rate reductions throughout the year, speculating that at least three such reductions are probable.


Despite these reservations, analysts foresee the continuation of an upward trajectory for the US dollar. This ascent is expected to be particularly pronounced in the near term, especially in relation to the Japanese yen.


However, analysts posit that the Japanese government and central bank may exhibit less concern over the yen's weakness, especially considering the underwhelming data pertaining to Japanese GDP.


usdjpy analysis, forex trading
USD/JPY daily chart, MetaTrader, 21.02.2024

21.02.2024



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