The USD/JPY exchange rate dipped to 138.50 on Japan's employment data

After the release of Japanese labor market data, the USD/JPY has fallen significantly. With today's trading, the asset dropped below the consolidation range it had been making between 138.62 and 138.85. Sharp losses are being seen in the major at 138.27, and if it manages to break through the key support level, we could see even lower prices.

The unemployment rate in Japan has been reported by the Japan Statistics Bureau to be 2.6%. Although the revised Jobs-to-Applications ratio of 1.29 is an increase from both earlier estimates and the prior release's 1.27, the difference is not statistically significant. In spite of this, there is no denying that employment data has stayed good, and yen bulls have been successful as a result.

US dollar index (DXY) is in a period of adjustment after hitting a 20-year high of 109.40 on Monday. Previous to this, the asset had been held by bulls in response to Federal Reserve (Fed) chief Jerome Powell's hawkish interest rate guidance preference despite a slowdown in US economic activity.

Since maintaining price stability is the Fed's primary concern, officials at the Jackson Hole Economic Symposium highlighted that the current interest rate hike cycle will likely continue. Inflation is at 8.5%, which means that households are being hit with the headwind of ever-increasing prices for consistently purchased goods. While a result, American businesses and consumers must remain patient as they await a revival of the economy.