Synopsis:

Credit Agricole sees Friday's NFP report as a key trigger that could push USD/JPY lower toward 150, especially with falling UST yields weighing on the pair.

Key Points:

1. UST Yields Declining, Adding Pressure on USD/JPY

   • Treasury Secretary Scott Bessent emphasized Trump’s focus on lowering 10Y UST yields, rather than pressuring the Fed for rate cuts.
   • Weaker ISM Services data failed to support short-term UST yields, further dragging down USD/JPY.

2. Technical Break Below Key Support Levels

   • USD/JPY broke below 152.70/80, where the 100- and 200-day moving averages intersect.
   • A brief move under 152.00 suggests downside momentum may persist.

3. Friday’s NFP as a Decisive Catalyst

   • A weaker-than-expected jobs report could further push down UST yields, reinforcing downward pressure on USD/JPY.
   • Credit Agricole maintains its end-Q1 target of 150 for USD/JPY.

Conclusion:

With falling UST yields and weaker US data, USD/JPY is at risk of further downside, particularly if Friday’s NFP disappoints. A continued break below 152.00 could accelerate the move toward 150, aligning with Credit Agricole’s near-term outlook.