USD/JPY – Dollar Moves Higher Ahead of Non-Farm Payrolls

The US dollar has reversed directions on Friday, posting gains at the expense of the Japanese yen. In the European session, USD/JPY is trading in the low-102 range. On Thursday, US Unemployment Claims posted a third straight drop and the markets are hoping for more good news on Friday from Non-Farm Employment Change and the Unemployment Rate. As well, UoM Consumer Sentiment will be released. In Japan, Leading Indicators showed little change in November.

Over in the US, employment numbers continue to show improve, as Unemployment Claims dropped for the third consecutive week. The key indicator dropped from 316 to 298 thousand, easily beating the estimate of 328 thousand and posting a two-month low. There was further good news, as GDP shot up 3.6% in Q3. On Friday, we’ll get a look at Non-Farm Payrolls and the Unemployment Rate. If these indicators point upwards, we could see the US dollar gain ground against the yen.

Earlier in the week, Bank of Japan Governor Haruhiko Kuroda stated that he remained committed to the BOJ’s inflation target of 2% within two years. Although deflation has dramatically decreased, inflation indicators point to much lower inflation than the 2% level. Kuroda also said that the Bank’s ultra-loose monetary policy would continue until the inflation target was met. However, some policymakers don’t share Kuroda’s optimism that this ambitious goal will be achieved and the lack of consensus at the BOJ, reflected in the minutes from the Bank’s last policy meeting, could weigh on the yen.

USD/JPY for Friday, December 6, 2013

USD/JPY December 6 at 11:05 GMT

USD/JPY 102.12 H: 102.22 L: 101.71

USD/JPY Technical

• USD/JPY has posted gains in Friday trading. The pair dropped moved higher during the Asian session and crossed above the 102 line. The pair is steady in European trading.
• 102.53 continues to provide resistance. With the yen still under pressure, this line cannot be considered safe. This is followed by a resistance line at 103.30.
• 101.19 is providing strong support. This is followed by support at the key level of 100.
• Current range: 101.19 to 102.53

Further levels in both directions:

• Below: 101.19, 100.00, 98.92 and 98.15
• Above: 102.53, 103.30, 104.17 and 105.70

OANDA’s Open Positions Ratio

USD/JPY ratio has reversed directions in Friday trading and is pointing to gains in long positions. This movement is reflected in the pair’s current movement, as the dollar has pushed higher. The ratio is comprised of a majority of long positions, reflecting a trader bias towards the dollar continuing to post gains against the yen.

The dollar has moved higher, recovering most of the losses sustained on Thursday. We could see some volatility from the pair in the North American session, as the US releases key employment and consumer confidence data.

USD/JPY Fundamentals

• 5:00 Japanese Leading Indicators. Estimate 109.9%. Actual 109.9%.
• 13:30 US Non-Farm Employment Change. Estimate 180K.
• 13:30 US Unemployment Rate. Estimate 7.2%.
• 13:30 US Average Hourly Earnings. Estimate 0.2%.
• 13:30 US Core PCE Price Index. Estimate 0.1%.
• 13:30 US Personal Spending. Estimate 0.3%.
• 13:30 US Personal Income. Estimate 0.3%.
• 14:55 US UoM Preliminary Consumer Sentiment. Estimate 76.2 points.
• 14:55 US UoM Preliminary Inflation Expectations.
• 20:00 US FOMC Member Charles Evans Speaks.
• 20:00 US Consumer Credit. Estimate 14.6B.

*Key releases are highlighted in bold

*All release times are GMT

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