USD/JPY longs have been the trade-of-the-year in the FX market in 2022 and today’s strong jobs numbers make it more likely the trend isn’t over yet.

The pair is up a whopping 220 pips today to 135.06.

The gain wipes out much of a brutal four-day drop in the pair. Technically, it cracks the 61.8% retracement of that move and is now about 250 pips from making the round trip. It also crossed back above the 55-day moving average, which is at 134.04 today.

The July 22 low of 135.56 offered some resistance so far and that is a short-term marker to watch.

What’s encouraging for the bulls is that the latest rally has come on bullish fundamental news. It’s also been confirmed by a strong move in bonds and Fed fund futures. US 2-year yieldshave moved up 20 bps today to 3.24%. That’s erased the late July/early-Augugust decline. Importantly, that decline co-incided with the drop in USD/JPY.