USD/JPY Drops Below 148 – Yen Carry Trade Unwind Chatter Grows
10-year Japanese Government Bond (JGB) yields climbed to their highest level since 2009 on Thursday, March 6, sending the USD/JPY below 147.5. The USD/JPY pair last dropped below 147.5 during the August 2024 Yen carry trade unwind that sent the pair to a 2024 low of 139.576.
Rising expectations for a Bank of Japan rate hike and the potential for multiple 2025 Fed rate cuts are narrowing the US-Japan interest rate differential, weighing on USD/JPY.
USD/JPY Trends: US Jobs Report in Focus
Later in the US session, the US Jobs Report could provide insights into the Fed rate path and USD/JPY trends. Economists forecast a steady 4% unemployment rate and 4.1% year-on-year average hourly earnings growth in February.
Softer-than-expected wage growth and higher unemployment could drive expectations for a June Fed rate cut, potentially dragging USD/JPY toward 147.5. Conversely, tighter labor market conditions and rising wages may sink bets on a June move, driving the USD/JPY pair toward 150, a key resistance level.
Beyond the jobs data, investors should closely monitor tariff developments and FOMC members’ views on inflation, employment, and the Fed’s rate path.
