US Jobs Data Clouds Fed Rate Path, Pushing Yen Lower

The Japanese yen dropped to 143 per dollar, reversing a recent uptrend as the dollar strengthened on uncertainty about the Federal Reserve's upcoming interest rate cut. The latest US jobs report did not clarify the Fed's rate path, leaving traders awaiting key US inflation data this week. Last week, the yen surged nearly 3% and reached a near year-to-date high, driven by expectations of further rate hikes by the Bank of Japan due to solid growth, rising wages, and ongoing inflation pressures. BoJ policymakers have also signaled that they will adjust monetary policy further if their economic and price forecasts are met. On the economic front, Japan's economy grew at an annualized 2.9% in the second quarter, below the advance estimate of 3.1% and market expectations of 3.2%.

From a technical perspective, the first resistance level is at 143.40. If this level is surpassed, the next targets will be 144.40 and 145.00. On the downside, the initial support is at 141.70; if this level is breached, the next support levels to watch will be 140.50 and 140.00.