USDJPY Daily Chart – 110226 – Intervention Warnings
US Jobs Report to Spotlight the Fed
While Prime Minister Takaichi’s fiscal spending plans and the BoJ’s policy outlook influence demand for the yen, US labor market data will be key for the US dollar.
On Wednesday, February 11, the delayed US jobs report will fuel speculation about an H1 2026 Fed rate cut. Economists expect average hourly earnings to rise 3.6% year-on-year (YoY) in January, down from 3.8% in December. Meanwhile, economists forecast unemployment to remain at 4.4%.
Softer wage growth could raise bets on an H1 2026 Fed rate cut, weighing on the US dollar. Typically, slower wage growth curbs consumer spending, dampening demand-driven inflation. Cooling inflationary signals would support a more dovish Fed rate path. Given these dynamics, an unexpected rise in unemployment would likely weigh more heavily on the US dollar.
Today’s data follows weaker-than-expected US JOLTs job openings and retail sales data. The numbers lifted bets on an H1 2026 Fed rate cut. According to the CME FedWatch Tool, the chances of a June Fed rate cut increased from 56% on February 3 to 75.2% on February 10.
Importantly, a more hawkish BoJ policy stance and a more dovish Fed rate path would indicate narrowing US-Japan rate differentials in favor of the yen. Narrowing rate differentials would be bearish for USD/JPY.
Technical Outlook: Key Levels to Watch
For USD/JPY price trends, traders should track technical indicators, incoming economic data, government fiscal policies, and central bank chatter.
On the daily chart, USD/JPY trades below its 50-day Exponential Moving Average (EMA), but holds above the 200-day EMA. The EMA positions signal a bearish near-term but bullish longer-term bias. Favorable yen fundamentals align with the short-term technicals, supporting a bearish medium-term outlook.
A break below the 200-day EMA would signal a bearish trend reversal, bringing the 150 support level into play. If breached, 145 would be the next key support level.
Notably, a sustained fall through the EMAs would reinforce the negative medium- to longer-term price outlook.
AloJapan.com