USD / JPY – Unemployment Rate Rises to 4.2% despite fall in participation rate

Unemployment rate in Japan in Dec came in at 4.2% after seasonal adjustment, surprising analysts expecting a 4.1% figure, unchanged form November’s rate. Beneath the headline figure, number of employed persons decreased by 380,000 Y/Y, a 0.6% fall. Job to applicant ratio is slightly higher at 0.82 to every applicant. Participation rate has also fell from 58.9% to 58.5% which should have improved unemployment rate as it cuts down the number of unemployed.

The Ministry of Internal Affairs and Communications announced that average monthly consumption per household in Dec was 325,492 Yen, lower by 0.7% and worse than analysts forecasts of 0.2% decline. Average consumption for 2012 is 359,482 yen, 2.2% higher compared to 2011 average.

This does not bode well for Japan, as there are signs that progress made in 2012 appears to be unraveling. However this should also not come as a “surprise” anymore as BOJ / PM Abe must feel that the situation is dire enough for them to embark on the “strong” stimulus intervention. USD/JPY continues to weaken as traders see even more scope for further BOJ action, while Nikkei 225 continued to climb as a result of similar sentiments.

Hourly Chart

USD/JPY has cleared 90.0 last week and stayed above for the entire week. We’ve also cleared 91.0 and 92 appears to be a viable target with US NFP later today bound to inject high volatility.

Weekly Chart

Weekly chart is also showing high bullish momentum as we head into February, with seasonal winds pushing USD/JPY higher. What more can we say? Yen is weakening at a rate that is unprecedented. Current price is so high that almost all Moving Averages are showing uptrend, with oscillators firmly in oversold regions. Reference levels have also been rendered useless as price has moved into uncharted waters. Skeptics remains, looking for a significant pullback ever since price was in the 80s but it never came. Now that we are in the low 90s, there is still no evidence of price slowing down. The bottomline remains: Sell in a strong uptrend at your own risk, though buyers should be afraid of eventual pullbacks that could be painful especially from a bullish run like this.

More links:
USD/JPY – Yen Edges Lower after Weak Japanese Data
Keep Your Powder Dry Ahead Of NFP

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