USD/JPY finds intermediate support around 134.40 as focus shifts to US NFP
- USD/JPY has sensed some buying interest around 134.40 as investors are shifting their focus toward US NFP data.
- The market mood seems divided as risk-perceived currencies are enjoying bids while US equities are facing pressure.
- US banking woes have renewed as PanWest Bancorp has come under pressure.
The USD/JPY pair has gauged an intermediate cushion after a perpendicular sell-off to near 134.40 in the Asian session. The asset witnessed massive selling pressure after neutral interest rate guidance came from the Federal Reserve (Fed) post a widely anticipated 25 basis point (bp) rate hike.
S&P500 futures have recovered some losses posted in early Asia, showing signs that investors are digesting uncertainty about the further roadmap of arresting stubborn United States inflation by the Fed. The overall market mood seems divided as risk-perceived currencies are enjoying bids while US equities are facing pressure.
Meanwhile, US banking woes have renewed as another commercial bank has come under pressure. Bloomberg reported that PacWest Bancorp is considering strategic options, including a potential sale. PacWest's shares fell by more than 50% in the post-market, indicating significant investor concern about the bank's situation.
Investors should be aware that Japanese markets are closed today on account of Greenery Day
The US Dollar Index (DXY) has dropped to near 101.20 on neutral Fed guidance, renewed US banking jitters, and concerns over the US debt ceiling. Further delay in debt ceiling increase could result in loss of timely payments from the US Treasury.
On Wednesday, the US Automatic Data Processing (ADP) agency reported an addition of fresh 296K jobs in April vs. the estimates of 150K and the former release of 145K. Upbeat US ADP data indicates tight labor market conditions in the US economy.
Going forward, US official Employment data will be of utmost importance. The Unemployment Rate is seen unchanged at 3.5%. According to the consensus for Nonfarm Payrolls (NFP), the US economy added 179K in April lower than the former release of 236K.
Apart from the labor market numbers, Average Hourly Earnings will be keenly watched. The economic indicator is seen unchanged at 0.3% and 4.2% on a monthly and an annual basis.