USD/JPY – Close to 104 As Markets Await Non-Farm Payrolls

USD/JPY is showing little movement on Friday, as the pair continues to trade slightly below the 104 line on Friday. The dollar continues to trade at high levels as the markets expect good tidings from Non-farm Payrolls. The surging dollar has picked up about 200 points against the yen in little more than a week. There are no Japanese releases on Friday.

US employment numbers are in the spotlight on Friday, with Non-Farm Payrolls and the Unemployment Rate on the schedule. The markets are anticipating a strong reading from Non-Farm Payrolls, with the estimate standing at 199 thousand. Unemployment Claims disappointed on Thursday, as the key indicator jumped to 326 thousand last week, up from 311 thousand in the previous release. This missed the estimate of 319 thousand. Earlier in the week, ADP Nonfarm Payrolls jumped to 191 thousand, up from 139 thousand a month earlier. This practically matched the estimate of 192 thousand.

In Japan, the Tankan indexes painted a mixed picture in Q1. These releases are important gauges of the health the Japanese economy. The Manufacturing Index rose slightly to 17 points, falling short of the estimate of 19 points. However, the Non-Manufacturing Index showed a significant upturn, jumping to 24 points from 20 points, matching the forecast.

Over in the US, Fed chair Janet Yellen surprised the markets with unexpectedly dovish comments about the economy. Yellen noted that inflation and employment levels need to improve considerably, and the Federal Reserve would continue to provide monetary stimulus for some time. Currently, the Fed is purchasing $55 billion in assets under its QE scheme. There have been three tapers to QE so far, and Yellen plans to wind up the program in the fall, provided that the US economy does not run into any serious turbulence. At the same time, the Federal Reserve has stated that it has no plans to raise interest rates until sometime in 2015.

USD/JPY for Friday, April 4, 2014

USD/JPY April 4 at 11:00 GMT

USD/JPY 103.91 H: 103.95 L: 102.82

USD/JPY Technical

• USD/JPY is listless in Friday trade, as the pair continues to trade close to the 104 line.
• 104.17 continues to provide weak resistance. This is followed by 105.70, which has not been tested since October 2008.
• On the downside, 103.30 is providing support. The next support line is 102.53.
• Current range: 103.30 to 104.17

Further levels in both directions:

• Below: 103.30, 102.53, 101.19, 100.00 and 99.57
• Above: 104.17, 105.70, 106.85 and 107.80.

OANDA’s Open Positions Ratio

USD/JPY ratio is pointing to gains in short positions in Friday trading, which has been the pattern for most of the week. The ratio now has a majority of short positions, indicating  trader bias towards the yen reversing its current spiral.

USD/JPY remains at high levels and is flirting with the 104 line. We could see some movement from the pair in the North American session, as the US releases Non-farm Payrolls.

USD/JPY Fundamentals

• 12:30 US Non-Farm Employment Change. Estimate 199K.
• 12:30 US Unemployment Rate. Estimate 6.6%.
• 12:30 US Average Hourly Earnings. Estimate 0.2%.

*Key releases are highlighted in bold

*All release times are GMT

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