Wall Street’s Tech Rout Gives the Yen a Lift. USD/JPY Faces Fresh Pressure

The selloff in US technology stocks is giving the Japanese yen a fresh boost.

After the Nasdaq plunged 5.5% on Thursday, investors moved towards safer assets, sending the yen to a one-week high near 157.40 per dollar. The dollar, meanwhile, struggled to gain ground as falling US Treasury yields weakened its appeal.

This marks a shift from earlier in the week, when yen weakness pushed USD/JPY towards the 159 level. The latest move suggests that risk sentiment is once again becoming an important driver of the pair.

US Jobs Data Could Set the Next Direction

Friday’s US nonfarm payrolls report is now in focus. A weaker-than-expected reading could reinforce expectations of a less hawkish Federal Reserve, putting further pressure on the dollar and potentially dragging USD/JPY lower.

A stronger jobs report, however, could revive expectations for tighter US monetary policy and help the pair recover.

For now, the yen has gained some support from risk aversion, but a sustained rally will likely require more than a temporary stock-market selloff. The gap between US and Japanese interest rates remains an important factor to watch.