Analysis of Trades and Trading Tips for the Japanese YenThe price test at 144.27 occurred when the RSI indicator had already moved significantly above the zero line, but the strong U.S. labor market data offered a high probability of the dollar strengthening against the yen, which I decided to take advantage of. As a result, the pair rose toward the target level of 145.06.
The confident growth in U.S. non-farm employment recorded in May exceeded experts' expectations' causing noticeable fluctuations in currency, markets. The publications of data showing the creation of 139,7000 new jobs versus the forecasted 127,000 instantly strengthened the U.S. dollar, putting pressure on the Japanese yen. The yen's reaction to the news was immediate: the currency weakened significantly against the dollar. Investors perceived the data as a signal of the strength of the U.S. economy and the likely continuation of Federal Reserve's tight monetary policy. Furthermore, the stable unemployment rate in the U.S. recorded at 4.2%, also reinforced the market's optimistic sentiment.
Today's data shows that Japan's GDP for the first quarter was revised upward, which helped the yen recover slightly from Friday's losses against the U.S. dollar. However, despite the positive revision, Japan's economy still faces serious challenges. Weak domestic demand and an aging population continue to pressure growth, while geopolitical uncertainty poses additional obstacles. The Bank of Japan maintains a wait-and-see approach and has no plans to raise interest rates for now, which had previously provided good support to the the yen. Strong growth in bank lending also contributed to increased demand for the yen.
