USD/JPY Price Forecast: Are traders holding back below 158.00 as US NFP approaches?

USD/JPY edges up from its weekly low as continued USD buying offers support.
Ahead of the US NFP, spot gains remain constrained as a hawkish BoJ and intervention risks cushion the JPY.
With recent trading confined to a range, taking a firm directional position calls for caution.

The recovery in USD/JPY lacks momentum, leaving the pair below 158.00 in early European trading despite an intraday rebound from the weekly low reached earlier on Friday. With the weekend approaching, traders are awaiting fresh direction from the closely tracked US Nonfarm Payrolls (NFP) report.

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Support for USD/JPY comes from renewed US Dollar (USD) strength, as expectations of a December increase in borrowing costs by the US Federal Reserve (Fed) combine with lingering geopolitical uncertainty. These factors allow the USD to extend the previous day's recovery from its weakest level since late September. The pair's gains remain limited, however, as the Bank of Japan's (BoJ) hawkish stance and the risk of intervention help prevent a sharper decline in the Japanese Yen (JPY).

The near-term technical outlook remains bearish, with spot trading below both the 100-day Simple Moving Average (SMA) at 159.09 and the 50.0% Fibonacci retracement at 158.44. At 49.37, the Relative Strength Index (RSI) is broadly neutral, offering little counterweight to the negative bias. While the Moving Average Convergence Divergence (MACD) histogram has levelled off just above zero, this points to fading bearish momentum rather than a clear recovery.

With USD/JPY having traded within a range for roughly seven weeks, a decisive break in either direction would provide a more reliable basis for assessing its near-term path. Immediate upside resistance stands at the 50.0% retracement of 158.44, with the 100-day SMA at 159.09 and the 61.8% retracement at 159.76 coming next. Further up, the 78.6% level at 161.65, together with the cycle high near 164.05, marks a broader ceiling.

Initial downside support lies at the 38.2% Fibo. level of 157.12, followed by the 156.65 area that marks the trading range's lower boundary. Should selling pressure return, the 23.6% retracement at 155.48 could become a more distant downside target before USD/JPY eventually falls towards the cycle low around 152.83.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

USD/JPY daily price chart

Economic Data Indicator

What Does Nonfarm Payrolls Measure?

Currency-market sentiment can shift sharply following the Nonfarm Payrolls release, as monthly payroll changes are highly volatile and subject to substantial revisions. Published by the US Bureau of Labor Statistics (BLS), the report measures new jobs created across US non-agricultural businesses in the preceding month. Revisions can themselves generate volatility in the Forex market. A strong reading is generally considered positive for the US Dollar (USD), whereas a weak figure is viewed as negative. However, revisions to earlier months' figures and the Unemployment Rate matter just as much as the headline number. The market response therefore hinges on investors' assessment of the BLS report in its entirety.

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Upcoming release: Fri 06 Nov 2026 13:30

Release frequency: Every month

Consensus estimate: 65K

Prior reading: 29K

Data source: US Bureau of Labor Statistics

Why Does This Report Matter to Traders?

Substantial currency-market volatility often follows America’s monthly jobs report, widely regarded as the most important economic indicator for forex traders. Published on the first Friday after the month under review, the report tracks changes in employment that are closely linked to the economy’s overall performance and watched carefully by policymakers. With full employment among the Federal Reserve’s mandates, labour-market developments inform its policy decisions and, in turn, influence currencies. Although several leading indicators help shape forecasts, Nonfarm Payrolls often catch markets by surprise. A reading above the consensus estimate generally supports the USD.