USD/JPY: Battered Dollar Plunges Near 2024 Lows as Yen Surges to ¥142 on Slowing US Hiring

Japanese yen is on a tear — currency is shifting gears powered by one report after another, flaunting a 12% rise in just three weeks.

• The USDJPY extended its super trend to the downside after fresh data out of the US suggested some pain for the American economy. The July jobs report, showing 114,000 new hires or well below estimates of 174,000, added fuel to the yen’s rally even if it didn’t need any more fuel. The dollar-yen pair dropped 2.2% on Friday only to continue sinking today. The exchange rate stretched the drop Monday morning, diving to ¥142.00 — erasing almost all of its losses for the year — as forex bros prepared to step into the new week and yen bulls celebrated their long-awaited windfall.
• The yen hit a 38-year low of ¥162.00 to the dollar in mid-July. Since then, the Japanese currency has been on a tear, adding a monster 12% gain and transforming itself into the best-performing major currency across the forex board. Pent-up dollar-yen selling was finally unleashed when the Bank of Japan hiked interest rates by 0.25% last week, surpassing expectations of a 0.10% rate bump. No dollar bull was seen on that day or ever since.
• Looking ahead, markets are pricing in more pain for the US dollar as expectations build for a bigger interest rate cut by the Federal Reserve in September. Previously, analysts were eyeing a 25-basis-point cut. After the dismal July jobs report, however, money managers ramped up their projections in hopes that a juicier rate cut would help steer the economy away from looming recession pressures.