Japanese Yen steadies against US Dollar after strong NFP report

USD/JPY trades around 155.85 on Friday at the time of writing, virtually unchanged on the day. The pair remains stable despite the US Dollar's (USD) positive reaction to a much stronger-than-expected US employment report, as the Japanese Yen (JPY) retains support from expectations of monetary tightening in Japan.

United States (US) Nonfarm Payrolls (NFP) increased by 162K in August, according to data released by the Bureau of Labor Statistics (BLS) on Friday, compared with market expectations for an increase of just 56K. July's figure was revised to 21K, while June's reading was raised to 31K.

The report also showed that the Unemployment Rate remained unchanged at 4.1%, in line with expectations. The Labor Force Participation Rate rose to 61.6% from 61.4% previously. Meanwhile, annual Average Hourly Earnings growth eased slightly to 3.1% from 3.2% in July.

The substantial upside surprise in job creation provides immediate support to the US Dollar by easing concerns over a sharp deterioration in the US labor market. However, this boost is not enough to push USD/JPY significantly higher, as the strength of the Japanese Yen offsets the Greenback's positive reaction.