BUZZ-COMMENT-Dollar's data-led setback vs yen may be limited before payrolls

Credit: REUTERS/Philippe Wojazer

Jan 28 (Reuters) - USD/JPY fell from Friday's 115.68 post-Fed high by the 76.4% Fibo of January's earlier slide after U.S. PCE, ECI and Michigan sentiment reports modestly trimmed Treasury yield and dollar gains priced in after Wednesday's Fed events, but downside looks limited ahead of next week's jobs report.

Unless next week's ISM and monthly jobs data are weaker than forecast, the Fed will likely proceed with returning policy to something close to pre-pandemic settings, supporting USD/JPY.

Major supports are the 21-day moving average and 38.2% Fibo of this week's advance at 114.84-5, followed by the 50% and tenkan at 114.575 on EBS.

The downwardly revised final January Michigan consumer sentiment reading at a decade low pushed Treasury yields and the dollar to new session lows. But the pullbacks are also being promoted by position squaring into month-end and ahead of the more important ISM and non-farm payrolls reports next week.

Market pricing still projects five Fed rate hikes this year, rather than the four priced in before the Fed, and the BOJ is nowhere near tightening . But the S&P 500 needs to retake the 200-DMA to weaken demand for the haven yen.

For more click on FXBUZ



(Randolph Donney is a Reuters market analyst. The views expressed are his own.)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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