Japanese yen soars on weak US jobs report

[Redator]

The Japanese yen is steady on Monday. In the European session, USD/JPY is trading at 147.72, up 0.09% on the day. On Friday, the yen soared 2.2%, its best one-day showing since April.

US nonfarm payrolls misses forecast

The week ended with a softer-than-expected US employment report. Nonfarm payrolls for July rose by only 73 thousand, missing the market estimate of 110 thousand. Adding to the bad news, the June and May reports were both revised sharply lower, down by a combined 258 thousand. The unemployment rate ticked higher to 4.2%, up from 4.1%.

The weak July reading and the downward revisions indicate that the labor market may be cooling more quickly than initially anticipated. The weak numbers support the case for the Fed to lower interest rates at the next rate meeting in September. The likelihood of a cut has climbed to 75%, compared to 63% on Thursday.

The soft employment report should serve as a wake-up call to the effect of US tariffs on the economy. The tariffs have not sent inflation significantly higher and the job market had appeared to weather the tariffs. The July employment report is a rude awakening, indicating that the employment picture is more dire than previously thought.

Investors eye Bank of Japan minutes

The Bank of Japan will release the minutes of the June BoJ meeting on Tuesday. Investors will be looking for insights as to the central bank's rate path. The BoJ is expected to raise rates before the end of the year and has revised upwards the core CPI forecast to 2.7% for this fiscal year, up from 2.2% in April.

USD/JPY Technical

• USD/JPY has pushed above resistance at 147.28. Next, there is resistance at 147.59.
• 1.4703 is providing support

USDJPY 1-Day Chart, August 4, 2025

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