While the strength of the dollar has fallen in general, with heavy resistance at around 147 yen, weaker-than-expected US October Job Openings and Labor Turnover Survey (JOLTS) data saw the dollar-yen currency pair (USD/JPY) drop to 146.56.
Subsequent attempts at recovery stalled at 147.38, with the inability to surpass the previous high set earlier on December 5 highlighting the strength of the resistance level.
October’s US JOLTS report showed a decline in job openings for the second consecutive month, fuelling speculation that the US Federal Reserve may soon pause its rate hikes and potentially even consider cuts in the spring.
This shift in expectations triggered a general decline in US long-term bond yields and temporarily halted the Dow’s upward momentum.
Should the dollar breach the support level at 146.50, a retest of the December 4 low of 146.22 appears likely.
The US ISM Manufacturing PMI fell below 50 for the 13th consecutive month on December 1,
coinciding with less hawkish remarks from Fed Chair Jerome Powell on interest rates, led to large USD/JPY sell positions being placed.
The dollar-yen pair tumbled to 146.65 yen in the early hours of December 2, breaching the previous low of 146.67 yen set on November 29.
The decline continued, reaching a nadir of 146.22 yen on the morning of December 4, marking the lowest point since the November 13 peak of 151.90 yen.
However, a buying surge propelled the pairing back up to 147.44 yen in the early hours of December 5, narrowly avoiding a break below the 146-yen level.
The yen’s strength persisted, and the pair dipped to 146.56 yen following the release of US October JOLTS job openings at midnight on December 5.
Subsequent recovery efforts were limited, with the USD/JPY currency pair encountering strong resistance at 147.38 yen.
This pattern is expected to continue until the release of the Non-Farm Payrolls report on Friday.