The USD/JPY pair remains in positive territory, recovering from Monday’s losses fueled by an uptick in US Treasury yields, bolstering the Greenback (USD). Currently trading at 147.80, the pair is up 0.20% at the time of writing. Data from the United States (US) painted a mixed picture, with solid job openings contrasting slightly weaker consumer confidence figures.

The US Department of Labor’s Job Opening and Labor Turnover Survey (JOLTs) revealed a rise in job openings to 9.02 million, surpassing expectations and underscoring a robust labor market, particularly in education and health services. Concurrently, the Conference Board’s Consumer Confidence poll for January came in at 114.8, slightly below consensus, reflecting slower inflation and anticipation of lower interest rates ahead.

The overall outlook for the US economy suggests a soft landing, with resilience despite downward trending inflation. Market focus now shifts to Wednesday’s Federal Reserve monetary policy decision, where rates are expected to remain steady at 5.25%-5.50%. Attention will be on discussions regarding halting the balance sheet reduction, along with Chair Jerome Powell’s press conference.

In Japan, the unemployment rate fell to 2.4% in December, signaling a cooling labor market. However, Japan’s inflation report last week revealed a drop below the 2% goal set by the Bank of Japan (BoJ), rising by 1.6% year-on-year, down from 1.9%. This may deter the BoJ from ending its negative interest rate cycle.

Trade Idea:

Monitor USD/JPY for potential bullish continuation above key resistance levels. Keep an eye on the Fed’s decision and Powell’s commentary for market direction clues.