Ella 
In the Asian market on Thursday, the yen attracted some safe-haven capital inflows and recovered most of the week’s losses against the US dollar over the past three days. The U.S. ADP employment change released on Wednesday showed a significant decrease in private sector employment. The U.S. Department of Labor reported the day before yesterday that U.S. JOLTs job vacancies dropped to the lowest level since March 2021 in October, which is seen as another sign that labor market tensions may be easing. At the same time, the data heightened market concerns about an economic slowdown, reduced investors’ appetite for risky assets, and promoted demand for traditional safe-haven assets.
Meanwhile, USD/JPY continues to struggle to rebound above the 100-day simple moving average (SMA) support breakout level and is further weighed down by the dollar’s weakness. Upcoming U.S. labor market data has reaffirmed market bets that the Federal Reserve will cut interest rates early next year, sending the 10-year U.S. Treasury yield near three-month lows. This is therefore negative for the US dollar and weighs on USD/JPY.
Nonetheless, Bank of Japan (BoJ) board members have recently played down speculation that the BOJ is about to shift its policy stance. This could dampen aggressive bets by yen bulls and provide some support for the USD/JPY pair ahead of Friday’s key U.S. monthly employment data, better known as the NFP report. Meanwhile, traders will take cues on Wednesday from the customary weekly jobless claims data, which, along with broader risk sentiment, should provide some impetus to USD/JPY trades.
