- USD/JPY climbs to 152.10 amid risk-off sentiment.
- Investors await US NFP data, expected at 175K.
- Fed officials remain cautious on rate cuts despite easing inflation.
USD/JPY rose 0.48% to 152.10 on Friday, driven by the US Dollar's strength amid cautious remarks from Federal Reserve officials. Traders are closely watching the upcoming Nonfarm Payrolls (NFP) report, expected to show a 175K job gain for January. A whisper estimate suggests a slightly higher reading of 199K, pointing to continued labor market resilience.
With the unemployment rate projected to hold steady at 4.1% and wage growth stabilizing at 3.8% YoY, markets remain alert to any surprises that could influence the Fed's monetary policy outlook. Recent jobless claims data hint at a potential upside surprise, which may reinforce the Fed's cautious stance on rate cuts.
Federal Reserve policymakers continue to push back against expectations for early rate cuts. Dallas Fed President Lorie Logan emphasized that even if inflation moves closer to 2%, it would not necessarily justify immediate easing. She noted that a stable labor market combined with lower inflation supports a neutral policy stance, leaving little room for near-term cuts.
Meanwhile, Chicago Fed's Austan Goolsbee pointed to rising fiscal uncertainties, suggesting they could slow the pace of future rate reductions. Later today, Fed officials Michelle Bowman and Adriana Kugler are set to speak, potentially offering further insights into the central bank's policy direction.
The Fed's sentiment index remains firmly in hawkish territory, lending support to the US Dollar. However, today's jobs data could shift expectations depending on its outcome.
Technical Outlook: Bulls Hold the Edge
USD/JPY continues its upward momentum, with technical indicators rebounding from recent lows. The Relative Strength Index (RSI) hovers near the 30 level, indicating oversold conditions that could trigger a corrective move.
- Resistance: 152.50
- Support: 151.50
If buying interest persists, the pair could extend gains toward the 152.50 resistance level. As long as USD/JPY remains above key support, the outlook favors the bulls.
