The Japanese yen (JPY) held steady against the US dollar (USD) on Tuesday, with USD/JPY showing muted movement despite a softer Greenback, as investors weighed mixed signals from the US labor market and a cautious stance from the Bank of Japan (BoJ).
At the time of writing, USD/JPY is hovering around the 154.00 mark after volatile early trading that briefly lifted the pair to a new nine-month high near 154.50 before pulling back. The reversal followed disappointing US employment data, which added to signs of a cooling job market and fueled expectations that the Federal Reserve (Fed) could move closer to policy easing in the coming months.
Weak US jobs data reinforces Fed rate-cut expectations
Recent data from ADP revealed that the United States lost an average of 11,250 private-sector jobs in the four weeks ending October 25, down from 14,250 in the previous period.
The weak figure intensified concerns about slowing labor market momentum, strengthening the view that the Fed may soon need to act to support economic growth. According to the CME FedWatch Tool, traders are now pricing in a 70% probability of a rate cut in December, up from 62% a day earlier.
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major peers, remains near 99.40—its lowest level in two weeks—marking five straight sessions of decline.
Japan’s policy signals highlight economic fragility
In Japan, comments from Economy Minister Yoshitaka Kiuchi earlier on Tuesday underscored renewed government concern over the negative impact of a weak yen and elevated inflation.
Kiuchi noted that authorities aim to achieve wage growth exceeding inflation while implementing new measures to mitigate the burden of higher prices on households. He acknowledged that yen depreciation has increased import costs and that persistent inflation continues to weigh on private consumption.
The government is also finalizing a new growth-focused stimulus package, expected to be announced on November 21. The plan reportedly urges the BoJ to prioritize sustainable economic expansion alongside its price stability goal.
Meanwhile, a senior adviser to Prime Minister Sanae Takaichi has warned against premature rate hikes, arguing that tightening policy too early could threaten Japan’s still-fragile economic recovery.
