USD/JPY spikes to 135.00 mark on upbeat NFP report, lacks follow-through buying
- USD/JPY gains strong positive traction on Friday and draws support from a combination of factors.
- The upbeat US NFP report provides a goodish lift to the USD and acts as a tailwind for the major.
- A positive risk tone undermines the safe-haven JPY and provides an additional boost to the pair.
The USD/JPY pair catches aggressive bids during the early North American session and jumps to the 135.00 psychological mark in reaction to the stellar US monthly employment details.
In fact, the headline NFP print showed that the US economy added 253K new jobs in April against 179K anticipated, offsetting the downwardly revised reading of 165K. Adding to this, the unemployment rate unexpectedly fell to 3.4% during the reported month from 3.5% in March, which assists the US Dollar (USD) to regain strong positive traction and provides a goodish lift to the USD/JPY pair.
Apart from this, a positive turnaround in the global risk sentiment - as depicted by a goodish recovery in the equity markets - undermines the safe-haven Japanese Yen (JPY) and further contributes to the bid tone surrounding the USD/JPY pair. That said, the Federal Reserve's (Fed) less hawkish stance holds back the USD bulls from placing aggressive bets and keeps a lid on any further gains, at least for now.
Nevertheless, the USD/JPY pair, for now, seems to have snapped a three-day losing streak and stalled this week's sharp retracement slide from the 137.75-137.80 region, or a two-month high. Spot prices, however, remain on track to register losses for the first time in the previous four weeks. This makes it prudent to wait for strong follow-through buying before placing fresh bullish bets around the major.
Technical levels to watch