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  • Wall Street looks to open the day higher.
  • Markets expect the NFP to come in at 185,000 in April.
  • US Dollar Index climbs above 98 ahead of key data.

The USD/JPY pair is struggling to find direction for the second straight day and stays close to the 111.50 mark as markets are eagerly waiting for the U.S. Bureau of Labor Statistics to publish its April jobs report. As of writing, the pair was virtually unchanged on the day at 111.52.

Despite the broad-based USD strength, the pair struggled to gain traction as the risk-off mood helped the JPY stay resilient against the greenback. The US Dollar Index rally, which started on Wednesday after FOMC Chairman Powell dismissed the low inflation reading and said that the GDP was expected to expand at a healthy pace for the remainder of the year, extended into a third straight day today and the index was last up 0.2% on the day at 98.02.

Later in the session, the BLS is expected to report an increase of 185,000 in total nonfarm payrolls. More importantly, wage inflation, as measured by the average hourly earnings, is seen rising 0.3% following March’s dismal 0.1% reading.  

Previewing the data, “Overall, the labour market remains strong, but we think it is important to keep an eye on whether employment growth starts to decelerate. We expect average hourly earnings to have risen +0.25% m/m in April, unchanged at 3.2% y/y. We expect nonfarm payrolls to have risen 190k,” said Danske Bank analysts.

Key technical levels to watch for