USD/JPY – Yen Remains Steady, US Posts Mixed Employment Data

It’s been a quiet week for USD/JPY, which is trading at 122.70 in the North American session on Thursday. On the economic front, there was only one Japanese event on the schedule, with the Japanese 30-year bonds posting a yield of 1.39%. In the US, Unemployment Claims was unchanged at 276 thousand, disappointing the markets. Thursday’s other US employment release, JOLT Job Openings, came in at 5.53 million, well above the estimate. Traders should be prepared for volatility on Friday, as the US releases Retail Sales, PPI and UoM Consumer Confidence.

After a stellar performance by Nonfarm Payrolls last week, the markets were hoping for an encore from Thursday’s job numbers. Unemployment Claims came in at 276 thousand for a second straight week, higher than the estimate of 270 thousand. This should not be a cause for concern, since the four-week indicator, which is less volatile than the weekly measurement, remains at very low levels. There was much better news from JOLTS Job Openings, which surged to 5.53 million, crushing the forecast of 5.38 million.

The Federal Reserve’s recent policy statement hinted strongly about a rate hike in December, and this has understandably fueled market speculation that the Fed might finally press the rate trigger. At the same time, the Fed has been split over a rate hike for quite some time, and many members will be hesitant to vote in favor of raising rates unless they are confident that the US economy can withstand an interest rate hike. Employment numbers out of the US have certainly improved, with recent indicators such as the unemployment rate pointing to close to full employment in the US economy. At the same time, other indicators have not fared as well, particularly manufacturing data and inflation levels. While a rate hike in December is back on the front burner, it is by no means a done deal, making for plenty of speculation on the part of market players in the next several weeks regarding a possible move by the Fed.

USD/JPY Fundamentals

Thursday (Nov. 13)

• 3:45 30-year Bond Auction. Estimate 1.39%
• 13:30 US Unemployment Claims. Estimate 270K. Actual 276K
• 14:30 US Unemployment Claims Speaks
• 15:00 US JOLTS Openings. Estimate 5.39M. Actual 5.53M
• 15:15 US FOMC Member Charles Evans Speaks
• 16:00 US Crude Oil Inventories. Estimate 0.8M. Actual 4.2M
• 15:15 US FOMC Member William Dudley Speaks
• 18:01 US 30-year Bond Auction
• 19:00 US Federal Budget Balance. Estimate -130.2B
• 23:00 US FOMC Member Stanley Fischer Speaks

Upcoming Key Events

Friday (Nov. 13)

• 13:30 US Core Retail Sales. Estimate 0.4%
• 13:30 US PPI. Estimate 0.2%
• 13:30 US Retail Sales. Estimate 0.3%
• 15:00 US Preliminary UoM Consumer Sentiment. Estimate 91.3 points

*Key releases are highlighted in bold

*All release times are GMT

USD/JPY for Thursday, November 12, 2015

USD/JPY November 12 at 17:55 GMT

USD/JPY 122.65 H: 123.07 L: 122.63

USD/JPY Technical

• The Japanese yen showed limited movement in the Asian and European sessions. USD/JPY is showing more volatility in North American trade.
• 123.74 continues to provide resistance.
• On the downside, 122.40 is under strong pressure.
• Current range: 122.40 to 123.74

Further levels in both directions:

• Below: 122.40, 121.50, 120.40 and 118.53
• Above: 123.74, 125.63 and 126.84

OANDA’s Open Positions Ratio

USD/JPY ratio is almost unchanged, consistent with the lack of movement shown by the pair. Long positions retain a slight majority of positions (55%). This is indicative of slight trader bias towards the pair moving to higher ground.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.