Japanese Yen falls as Initial Jobless claims hold tight

• USD/JPY trades near 159.20 on Thursday, retracing part of last week's intervention-driven drop.
• Initial Jobless Claims came in at 199K against the 202K forecast, while Challenger Job Cuts eased to 33.4K in July from 45.8K.
• Markets look to Friday's Nonfarm Payrolls, with consensus near 80K and the Unemployment Rate seen unchanged at 4.2%.

USD/JPY trades modestly higher near 158.20 on Thursday, extending a fourth session of Japanese Yen (JPY) softness as the pair claws back ground lost to last week's coordinated Japan-United States (US) intervention.

The intervention afterglow is fading as Thursday's US labor data offered little to redirect the pair. Initial Jobless Claims fell to 199K, undershooting the 202K consensus and sitting a shade above the prior 198K, keeping layoffs historically subdued. Challenger Job Cuts for July dropped to 33.429K from 45.849K, reinforcing a picture of a labor market cooling through weaker hiring rather than accelerating separations.

Friday's Nonfarm Payrolls (NFP) report will overshadow the prior data however. A Reuters survey of economists points to an 80K gain in July after June's 57K, with the Unemployment Rate holding at 4.2%, Average Hourly Earnings holding at 0.3% on the month and 3.5% on the year, and the average workweek steady at 34.3 hours. Forecasts span a wide 75K-120K band, and several houses see the jobless rate ticking up to 4.3%. The wage component may carry more weight than the headline given the hawkish drift in Federal Reserve (Fed) commentary: Governor Lisa Cook said on Wednesday she was open to the idea that the central bank may need to raise rates to address inflation she described as too high.

Iranian Deputy Foreign Minister Kazem Gharibabadi told the Islamic Republic News Agency (IRNA) that the agreement would not automatically reopen the Strait of Hormuz. According to a senior Gulf official, there is a 50% chance that Iran and Oman will reach a deal by Friday. Meanwhile, US Vice President JD Vance told Fox News that talks with Iran were "messy," calling Iranians "extraordinarily difficult people."

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 158.20. The pair is consolidating just under the horizontal barrier at 158.28, while the 100-period Simple Moving Average (SMA) at 161.52 remains a much higher cap, keeping the broader tone in check. On the downside, price holds above the 20-period SMA at 157.57, with the Relative Strength Index (RSI) hovering near 47, hinting at neutral momentum after the recovery from near oversold conditions.

On the topside, immediate resistance is seen at 158.28, followed by the 100-period SMA near 161.52, where stronger supply could re-emerge. On the downside, initial support is located at 157.90, ahead of the 157.71 horizontal floor and the 20-period SMA at 157.57; a deeper slide would expose the next support level at 157.34.

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