USD/JPY Price Outlook: Holds steady near 156.70 while attention turns to US Non-Farm Payrolls

USD/JPY Holds Steady Ahead of Key US Jobs Data

During Thursday's European session, the USD/JPY currency pair remains confined to a narrow band near 156.70. Market participants are in a wait-and-see mode as attention turns to the upcoming release of the United States Nonfarm Payrolls (NFP) report for December, scheduled for Friday.

The US NFP figures are highly anticipated, as their outcome could shape expectations regarding the Federal Reserve’s future monetary policy direction. In 2025, the Federal Reserve implemented three 25 basis point rate reductions to address ongoing softness in the labor market.

Forecasts for the NFP report suggest the US economy will have added 60,000 new jobs, a slight decrease from November’s 64,000. The unemployment rate is projected to dip to 4.5%, down from the previous 4.6%.

On the other hand, the Japanese Yen has started to recover after a period of weakness, buoyed by a cautious market mood following renewed tariff threats from US President Donald Trump.

Technical Overview: USD/JPY

At the time of reporting, USD/JPY is trading flat near 156.76. The pair has been oscillating between 154.40 and 157.90 for more than six weeks. The price remains above the upward-trending 20-day Exponential Moving Average (EMA) at 156.35, which continues to support the short-term bullish trend. The positive angle of the 20-day EMA suggests buyers are stepping in on pullbacks.

• The 14-day Relative Strength Index (RSI) stands at 55.67, indicating a slightly bullish momentum as it stays above the neutral 50 mark.
• If the pair maintains its position above the 20-day EMA, further gains in line with the prevailing trend are likely. However, a daily close below this level could signal a shift to a more neutral outlook.
• A breakout above the November 20 high of 157.90 could pave the way for a move toward the January 2025 peak at 158.88. Conversely, a drop below the December 16 low of 154.40 may open the door to a decline toward the November 7 low of 152.80.

(This technical overview was generated with the assistance of AI tools.)