USD/JPY aims to recapture 24-year high near 141.00 amid firmer DXY, US ISM Services PMI eyed

• USD/JPY is gearing up to recapture its 24-year high at 140.80 as upbeat US NFP has strengthened DXY.
• The DXY has refreshed its two-decade high above 110.00 as odds for a hawkish Fed soar.
• Risk sentiment will remain in play as US markets will remain closed on account of Labor Day.

The USD/JPY pair is advancing towards the 24-year high at 140.80, recorded last week. The asset is gaining a lot of traction as the US dollar index (DXY) has refreshed its two-decade high at 110.03. The DXY is auctioning near the escalated levels and is gearing up for a fresh rally ahead.

As US Nonfarm Payrolls (NFP) remained upbeat last week, the DXY has become a darling asset for the market participants. The asset is gaining higher as higher additions of jobs by the US economy in August have delighted the Federal Reserve (Fed). Price pressures are extremely hurting the paychecks of the households as recent exhaustion signals are insufficient to force the latter to step up their spending pattern (quantity-wise). Therefore, higher employment generation will support the Fed policymakers to sound hawkish unhesitatingly.

Going forward, the release of the US ISM Services PMI will hog the limelight. As the US economy is known for possessing tech biggies and providing IT business to emerging economies, the importance of the US Services PMI is extremely higher. The economic data is seen lower at 54.9 against the prior release of 56.7. This may halt the DXY’s dream rally and the asset may find critical hurdles.

US Markets will remain closed on Monday on account of Labor Day, therefore, market sentiment will mainly drive the asset ahead.

On the Tokyo front, investors are awaiting the release of the second-tier economic data on Monday. The Jibun Bank Services PMI data is expected to remain stable at 49.2. While the release of Japan’s Gross Domestic Product (GDP) data will remain a key event ahead. The quarterly GDP is expected to improve to 0.7% against the prior release of 0.5%. While the annualized data is seen as extremely higher at 2.9% vs. 2.2% recorded earlier.