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Japanese yen spikes on wage data but slips below 154 after New York close

USD/JPY stayed just under 154.00 after Japan reported July nominal cash earnings growth of 4.7% year over year, the fastest since January 1997.

Reported · Written up by our desk · Major Pairs

Japan’s yen swung higher after data showed the fastest nominal wage growth since 1997, but it faded into the New York close, leaving USD/JPY trading just under 154.00.

FXStreet said nominal cash earnings rose 4.7% year over year in July versus a 3.9% consensus, with real wages up 2.4% for a seventh straight month. The report also showed base pay up 4.1% year over year, its fastest since April 1992.

According to FXStreet, the Bank of Japan’s case for faster tightening is supported by the idea that wage gains are structural rather than temporary, with wage increases driven by corporate profits amid a shrinking working-age population. However, the same data set indicated private consumption was flat in the second quarter and households had not yet translated recent real income gains into spending.

FXStreet also pointed to macro updates including an upward revision to second-quarter GDP to 1.4% annualized, while swaps pricing indicated a 98% probability of a quarter point rate move to 1.25% on September 18 ahead of the data. The yen’s reaction was described as fading over the session, leaving the currency about 40 pips lower on the day after a 147-pip round trip.

Latest closeUSD/JPY 153.54 ▼0.2%

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