USD/JPY STRUGGLES TO GAIN NEAR THE 149.00 MARK AMID THE USD SOFTNESS, INTERVENTION FEARS

USD/JPY trades sideways below the 149.00 area, supported by the suspected FX intervention by Japanese authorities.

US private payrolls rose by 89,000 in September vs. 180,000 prior.

10-year Japanese Government Bond (JGB) yield spiked to 0.8% for the first time since 2013 on Wednesday.

Market players await the highly-anticipated US Nonfarm Payrolls.

The USD/JPY pair oscillates in a narrow range around 148.95 during the early Asian trading hours on Thursday. Investors have adopted a cautious stance amid the suspicion of FX intervention by Japanese authorities late Tuesday. Furthermore, the upside momentum of the pair seems faded following the downbeat US data. Traders will take cues from the US Nonfarm Payrolls on Friday for fresh impetus.

The Automatic Data Processing (ADP) revealed on Thursday that US private payrolls for September rose by 89,000 from 180,000 in the previous reading, below the estimation of 153,000. The figure registered the lowest level since January 2021. Meanwhile, the US ISM Services PMI dropped to 53.6 in September versus 54.5 prior, in line with the market consensus.

The downbeat ADP Employment data exerted some selling pressure on the USD. Market players will focus on the US Nonfarm Payrolls data on Friday. If the data shows a softer result, it could trigger some sell-off in the Greenback.

On the JPY’s front, the 10-year Japanese Government Bond (JGB) yield reached 0.8% for the first time since 2013 on Wednesday. This put more pressure on the BoJ to its yield-curve cap and prepare for the end of its negative interest rate policy.

Early Wednesday, Japan’s top currency diplomat Masato Kanda said any intervention would not target forex levels but volatility while mentioning that it's normal for authorities not to comment on whether they intervened or not. Japan’s Chief Cabinet Secretary Hirokazu Matsuno said on Monday that he will continue to take appropriate steps on FX, but still have no comment on whether Japan intervened in the FX market. It’s worth noting that the 150.00 mark was the level that BoJ intervened last year. Therefore, traders should be cautious before placing aggressive bullish bets on the USD/JPY pair.

Moving on, the US weekly Jobless Claims will be released on Thursday. The closely watched event will be the US Nonfarm Payrolls on Friday. The US economy is expected to create 170,000 jobs in September. Traders will take cues from these events and find trading opportunities around the USD/JPY pair.