USD/JPY Sharply Lower

It may come as a surprise to some people to see the Yen rallying again after the "Abenomics" is about to take place and depreciate the Japanese currency. The reason behind the latest rally is the weak US data that has been coming out this week and last Friday.

First, we had lower than expected jobs report at 155K, way off from the 180K expected. Although experts say anything above 100K in a month is good, traders and investors couldn't sustain the bullish momentum in the US dollar and yesterday when the ISM data was released the bears took over. The US dollar dropped sharply against all pairs on result of 51, a lot lower than the 55 expected.

These signs are early indicators of a weakening US economy which cools off the chances of a rate hike at the third quarter of September.

Back to the Yen, USD/JPY went to 104.32 and then dropped to a low of 101.20. After the strong upward movement from 99.54 to 104.32, the pair is now again under bear pressure and it might reach the 100.00 level.

Chart: USD/JPY D1