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  • USD/JPY is trading at 111.44 between a range of 111.42 and 111.53 in a quiet Asian session
  • Markets await a catalyst from the nonfarm payrolls even in the U.S. session today as the dollar consolidates the Powell induced rally.  

USD/JPY was stuck in a range on the 111 handle overnight while the  US 10yr treasury yield climbed  from 2.50% to 2.56% as bond markets recalibrated to a less dovish Fed outlook as analysts at Westpac noted, explained that    the chance of a Fed rate cut by December, implied by Fed fund futures, decreased from 70% to 65%.  

As for Wall Street, the tone was dulled down following yesterday’s FOMC and the Dow Jones Industrial Average (DJIA), dropped 122.35 points, or 0.5%, to 26,307.79, and scored an intraday low at 26,180.36 which made for the worst session for Wall Street in a month.

  • The S&P 500 dropped 6.21 points, or 0.2%, to close at 2,917.52.
  • The Nasdaq Composite Index shed 12.87 points, or 0.2%, to 8,036.77.

U.S. data

Analysts at ANZ Bank summed up the data as follows:

  • Strong factory numbers:  US factory order numbers for March were stronger than expected up 1.9% m/m, bouncing back from a fall in February. This is a sign of improved business sentiment.
  • Worker productivity up:  Complementing the factory data was a 3.6% lift in Q1 nonfarm productivity in the US. This is the fastest rate of growth recorded in over four years, significantly exceeding market expectations. The strong growth in productivity offset rises in labour costs.

Non-Farm Payrolls: ADP and ISM point in different directions

USD/JPY levels

Valeria Bednarik, Chief Analyst at FXStreet explained that the pair maintains a neutral stance after closing around the current level for a third consecutive day:

 “The risk is skewed to the downside, as it remains unable to recover ground above the 200 DMA. hovering just below it. In the shorter term, and according to the 4 hours chart, the pair is trading between directionless 100 and 200 SMA, having spent the day attached to the 20 SMA which now gains downward strength. The pair can gain some directional strength either on a break below 111.20 or an advance beyond the 111.70 resistance area.”