USDJPY struggles at 147.00 after bouncing off one-month low 146.55

• The dollar dives 0.9% on the day and hits one-month lows at 146.55.
• US payrolls increase, but unemployment rises, and salaries slow down.
• USDJPY: More likely to peak at 155 than at 160 – MUFG.

The US dollar is trying to return above 147.00 in the US afternoon trading session, to trim losses after having lost nearly 0.9% on the day, reaching one-month lows at 146.55.

The US dollar dives on the back of the US Non-Farm Payrolls report

The greenback accelerated its downtrend on Friday, after the release of a mixed US NFP report. Employment creation remains robust, with non-farm private payrolls increasing by 261K in October, beating expectations of 200K and September’s figures revised up to 315K, from the previously estimated 4 K.

On the other hand, the unemployment rate has risen to 3.7% from 3.5% in September, above the consensus of 3.6%, while hourly earnings increased by 4,7% in October from 5% in September. These figures suggest that labor market conditions might be starting to ease and have revived the possibility of a shorter rate hike in December.

USDJPY: Ceiling at 155, with 160 a long way off – MUFG

From a wider perspective, Analysts at MUFG anticipate that the USDJPY peak might not be far off: “We forecast a near-term USDJPY ceiling of 155 given that it has already passed 150 once, is still hovering around 148, and considering the speed of its ascent over the last six-plus months (…) The 2 April 1990 high of 160.35 could come into view if the Fed steps up its communication with the market and a terminal rate of 5.5% to 6% comes into view, but we do not expect this at present.”

Technical levels to watch