USD/JPY weakens despite strong US NFP as intervention risks cap gains
Bởi Vishal Chaturvedi
Đã cập nhật: 3 Apr 2026
BÀI VIẾT PHỔ BIẾN
USD/JPY trades with a mild downside bias on Friday as lingering intervention fears support the Japanese Yen (JPY), even as the US Dollar (USD) remains firm against its major peers following the upside surprise in US Nonfarm Payrolls (NFP) data.
- USD/JPY under pressure as intervention fears cap gains despite a firm US Dollar.
- Markets remain cautious near the 160 level amid persistent warnings from Japanese authorities.
- Solid US data support the dollar and strengthen expectations that the Fed could keep rates unchanged for longer.
USD/JPY trades with a mild downside bias on Friday as lingering intervention fears support the Japanese Yen (JPY), even as the US Dollar (USD) remains firm against its major peers following the upside surprise in US Nonfarm Payrolls (NFP) data. Thin liquidity conditions due to the Good Friday holiday are also contributing to muted and choppy price action.
At the time of writing, USD/JPY is trading around 159.57, easing modestly after a brief spike to 159.82 in reaction to the US labor data.
According to data released by the US Bureau of Labor Statistics, the US economy added 178K jobs in March, beating expectations of 60K, while the Unemployment Rate ticked lower to 4.3% from 4.4%. February’s figure was also revised lower to show a loss of 133K jobs, compared to the previously reported decline of 92K, highlighting recent volatility in the labor market.
Average Hourly Earnings rose by 0.2% MoM in March, below the 0.3% forecast and down from 0.4% previously. On an annual basis, earnings increased by 3.5%, missing expectations of 3.7% and slowing from 3.8%.
The stronger-than-expected headline print supported expectations that the Federal Reserve (Fed) will keep rates unchanged for longer, with markets largely pricing out rate cuts amid Oil-driven inflation risks stemming from the ongoing US-Israel war with Iran.
However, business activity data painted a softer picture, with the S&P Global Composite Purchasing Managers' Index (PMI) easing to 50.3 in March from 51.9 in February, marking its weakest level since September 2023. Meanwhile, the Services PMI fell to 49.8, below the flash estimate of 51.1, signaling contraction and the lowest reading in over three years.
The soft PMI print did little to weigh on the US Dollar. The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, is trading around 100.15, extending gains for the second straight day.
Even so, USD/JPY struggles to draw support. Traders remain wary near the 160 level, as Japanese authorities have repeatedly signaled readiness to act against excessive volatility, keeping gains capped despite underlying US Dollar strength.
Nonfarm Payrolls FAQs
Nonfarm Payrolls (NFP) are part of the US Bureau of Labor Statistics monthly jobs report. The Nonfarm Payrolls component specifically measures the change in the number of people employed in the US during the previous month, excluding the farming industry.
The Nonfarm Payrolls figure can influence the decisions of the Federal Reserve by providing a measure of how successfully the Fed is meeting its mandate of fostering full employment and 2% inflation. A relatively high NFP figure means more people are in employment, earning more money and therefore probably spending more. A relatively low Nonfarm Payrolls’ result, on the either hand, could mean people are struggling to find work. The Fed will typically raise interest rates to combat high inflation triggered by low unemployment, and lower them to stimulate a stagnant labor market.
Nonfarm Payrolls generally have a positive correlation with the US Dollar. This means when payrolls’ figures come out higher-than-expected the USD tends to rally and vice versa when they are lower. NFPs influence the US Dollar by virtue of their impact on inflation, monetary policy expectations and interest rates. A higher NFP usually means the Federal Reserve will be more tight in its monetary policy, supporting the USD.
Nonfarm Payrolls are generally negatively-correlated with the price of Gold. This means a higher-than-expected payrolls’ figure will have a depressing effect on the Gold price and vice versa. Higher NFP generally has a positive effect on the value of the USD, and like most major commodities Gold is priced in US Dollars. If the USD gains in value, therefore, it requires less Dollars to buy an ounce of Gold. Also, higher interest rates (typically helped higher NFPs) also lessen the attractiveness of Gold as an investment compared to staying in cash, where the money will at least earn interest.
Nonfarm Payrolls is only one component within a bigger jobs report and it can be overshadowed by the other components. At times, when NFP come out higher-than-forecast, but the Average Weekly Earnings is lower than expected, the market has ignored the potentially inflationary effect of the headline result and interpreted the fall in earnings as deflationary. The Participation Rate and the Average Weekly Hours components can also influence the market reaction, but only in seldom events like the “Great Resignation” or the Global Financial Crisis.
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