USD/JPY spikes through 109.00 handle but lacks follow-through after mixed NFP report

   •  The US economy added 304K new jobs, beating the most optimistic estimates.
   •  Previous month’s reading revised lower and unemployment rate ticks higher.
   •  Earnings growth fall short of expectations and failed to provide an additional boost.

The USD/JPY pair finally broke out of its European session consolidation phase, with bulls now looking to build on the positive momentum further beyond the 109.00 handle post-NFP.

Having spent the early part of the day on the defensive, the US Dollar picked up pace after the latest US monthly jobs report showed that the US economy added 304K new jobs in January as against 165K expected. 

The headline NFP print did provide a minor lift to the greenback, though the reaction turned out to be short-lived as the previous month's reading was revised sharply lower to show an addition of 222K jobs versus 312 reported earlier.

Adding to the disappointment, the unemployment rate unexpectedly ticked higher to 4.0% and average weekly earnings growth also fell short of market expectations, coming in at 0.1% m/m, though held steady at 3.2% y/y rate.

Meanwhile, the prevalent cautious mood, as depicted by a weaker trading sentiment around equity markets, underpinned the Japanese Yen’s relative safe-haven demand and further collaborated towards capping any meaningful up-move.

Technical levels to watch