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The USD/JPY pair attracts some sellers to around 155.25 during the early Asian session on Thursday. The US Dollar (USD) softens against the Japanese Yen (JPY) on weaker-than-expected US jobs data and expectations of further US rate cuts.

Data released by the Automatic Data Processing (ADP) on Wednesday showed that private employers shed 32,000 jobs in November, compared to the 47,000 increase (revised from 42,000) seen in October. This figure came in below the market expectation of 5,000 growth and marked the largest monthly decline since early 2023. This report pointed to a weakening US labor market, which exerted some selling pressure on the Greenback against the JPY. 

According to the CME FedWatch Tool, interest rate futures traders are pricing in a nearly 89% chance of a quarter percentage point cut in the fed funds rate by the Fed next week, to 3.50%-3.75%, up from just 63% a month ago.

Rising Bank of Japan (BoJ) rate hike bets could also underpin the JPY and create a headwind for the pair. BoJ Governor Kazuo Ueda said on Monday that the Japanese central bank will consider the "pros and cons" of raising interest rates at its next policy meeting. Ueda further stated that the likelihood of the BoJ’s baseline scenario for growth and inflation being realized is gradually increasing. These remarks reaffirm market bets for a BoJ rate hike move, either in December or January. 

The US weekly Initial Jobless Claims data will be published later on Thursday. If the report shows a stronger-than-expected outcome, this could help limit the USD’s losses in the near term. On the other hand, any signs of a further weakening US labor market could drag the Greenback lower. 

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