The USD/JPY currency pair posted modest gains on Friday, trading at 161.30 after rebounding from a two-week low of 160.49 earlier in the Asian session. This movement occurred during thin trading conditions due to the US Independence Day holiday, which limited market activity and volatility [1].
The US Dollar had weakened sharply on Thursday following the release of softer-than-expected US Nonfarm Payrolls data, which signaled a cooling labor market. This data miss reinforced expectations that the Federal Reserve may have less room to maintain restrictive interest rates, leading to a decline in US Treasury yields and initial pressure on the Greenback [1]. However, the US Dollar later stabilized as traders adjusted their positions after the initial selloff, allowing USD/JPY to regain some traction [1].
From a technical perspective, USD/JPY is consolidating around the 100-period Simple Moving Average at 161.29, with the near-term bias described as neutral. The 20-period SMA at 161.91 acts as dynamic resistance, capping upside attempts, while the Relative Strength Index easing toward the mid-40s suggests fading bullish momentum rather than oversold conditions. Immediate resistance is noted at 161.39 and 161.91, while support levels are seen at 161.12, 160.90, and 160.79. A sustained break below these support levels could shift the bias more decisively in favor of sellers [1].
CONCLUSION
The USD/JPY pair stabilized after a volatile session driven by US labor market data and thin holiday trading. While the US Dollar initially weakened, it later recovered as traders repositioned, leaving the pair in a neutral technical stance. Market impact remains limited in the absence of further catalysts.