USD/JPY Weekly Forecast: An inevitable drift lower?

  • USD/JPY stays within descending channel after approaching upper border.
  • Non-farm payrolls overshadowed by Trump COVID-19 diagnosis.
  • Japanese statistics fail to provide evidence of quickening recovery.
  • US Non-farm Payrolls disappoint but unemployment improves more than expected.
  • Private sector addition of 877,000 jobs in the US reduced by a loss of 216,000 government positions.

The diagnosis of President Trump and First Lady Melania with COVID-19 on Friday shifted markets into a mild safety scare as the illness complicates an already uncertain election. 

The USD/JPY plunged from 105.65 to 104.95 as the news hit the wires and US Dow futures fell over 400 points.  But by the afternoon the USD/JPY had recovered most of its early losses and equities had cut their losses by more than half.  The yen’s traditional but limited safety role was highlighted as the dollar rose in other pairs as the President’s case became known.

Hope that Congress may

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