USD/JPY: in consolidation ahead of nonfarm payrolls; bearish bias?

• USD/JPY: capped ahead of key nonfarm payrolls, Tokoy out on holiday, quiet session ahead?
• USD/JPY: tracking Wall Street and yields, dollar consolidating.

USD/JPY has started out in what would otherwise be the Tokyo open, (Japan closed for 'Greenery day') 'with a little bid and currently, USD/JPY is trading at 109.14, down -0.05% on the day, having posted a daily high at 109.25 and low at 109.09.

USD/JPY was 'pegged' to the performance of yields and stocks on Wall Street overnight, capped by the 109.20 resistance level. The yen traded between 109.37 and barely recovered from the 108.92 low, ending the session at 109.17. 

It is likely to be a very slow burner today ahead of the nonfarm payrolls in the US session with the Japanese out and after some consolidation overnight. The focus there was on the outcome of the Fed's statement and ears were to the ground for sound bites from Trump's delegation in Bejing were trade talks have commenced between the two nations who have previously been engaged in a tit-for-tat show of hands in trade tariff exchanges. There were some positive headlines that can be read in the following 'Fundawrap' below:

Fundawrap: Fed, geopolitics and nonfarm payrolls spark up market jitters

Nonfarm payrolls preview:

Eyes now turn to the nonfarm payrolls. Analysts at Nomura are forecasting a 220k gain in nonfarm payroll employment in April (Consensus: 192k), consistent with an economy that continues to grow above potential:

"Average hourly earnings will likely increase 0.27% m-o-m (2.76% y-o-y), partly boosted by calendar effects (Consensus: 0.2%), while we expect the unemployment rate to decline 0.1pp to 4.0% (Consensus: 4.0%). Overall, after getting through the weatherrelated choppiness of the first few months in 2018, we expect April’s employment report to highlight steady labor market strength, setting the stage for further declines in the unemployment rate later this year."

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that technically, the 4 hours chart shows that the technical indicators entered bearish territory, with the Momentum still heading lower but the RSI aiming to recover some ground, currently at 42: "Moving averages in the mentioned chart maintain their bullish slopes below the current level, indicating that the decline could be considered corrective, at least as long as the price holds above them."