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  • The bearish pressure surrounding the United States (US) Treasury bond yields eases.
  • US Dollar Index stays in the negative territory below the 99 mark.
  • Unemployment in the US is expected to remain steady at 3.7%.

The USD/JPY pair closed the previous three trading days in the negative territory as the JPY continued to find demand with investors fleeing to safer assets amid concerns over a possible recession in the United States. After losing more than 100 pips since Tuesday, the pair seems to have gone into a consolidation phase below the 107 handle as participants shift their attention to the critical labour market data from the United States (US). As of writing, the pair was down 0.15% on the day at 106.75.

Reflecting the neutral market sentiment, the 10-year US Treasury bond yield, which erased more than 9% since the start of the week, is staying relatively quiet on Friday.  

Eyes on employment data

Meanwhile, the US Dollar Index extended its slide after closing the day below the 99 handle below on Thursday and made it difficult for the pair to stage a recovery. While investors are waiting for the US Bureau of Labor Statistics to release the nonfarm payrolls (NFP) figures, the index is down 0.11% on the day at 98.80.

Previewing the employment data, TD Securities analysts noted that they expect the NFP to come in at 150,000 in September following August’s disappointing reading of 130,000.  

“Reflecting the retrenchment in manufacturing, jobs in the goods sector should stay soft; however, we look for a modest rebound in employment in the services sector,” analysts added.  “We also note that temporary census hiring for canvassing purposes should continue to boost employment figures this month: we pencil in a 15k increase federal hires.”

Technical levels to watch for