USD/JPY – Steady As All Eyes on US Non-Farm Payrolls

USD/JPY is showing little movement on Friday, in sharp contrast to the volatility we saw on Thursday, as the day ended with the yen posting gains against the dollar. Over in the US, all eyes are on Non-Farm Employment Change, with the markets bracing for a weak reading. There are two other key events out of the US on Friday – the Unemployment Rate and Preliminary UoM Consumer Sentiment. The week wraps up with Federal Reserve head Bernard Bernanke addressing an IMF event in Washington. There are no releases out of Japan on Friday. 

US key releases continued to look sharp on Thursday. Advance GDP jumped 2.8%, in Q3, its sharpest gain since Q4 of 2011. This easily beat the estimate of 2.0%, pointing to faster economic expansion than anticipated by the markets. Unemployment Claims also looked solid, dropping slightly to 336 thousand, matching the forecast.

US employment numbers will be in the spotlight on Friday, with the release of Non-Farm Payrolls and the Unemployment Rate. NFP, a critical event which could move USD/JPY, is expected to fall to 121 thousand in October. However, it should be noted that the government shutdown in October resulted in some workers being removed from payrolls, which would explain the low October forecast. On Thursday, Unemployment Claims looked solid, coming in at 336 thousand, matching the forecast. An unexpectedly strong NFP release would likely fuel speculation of a possible QE tapering in December.

The BOJ released the minutes of its last policy meeting earlier in the week, and the board’s members were cautiously optimistic about the economy, referring to the economic recovery as “moderate”, stating that exports had picked up, and other sectors such as consumer spending and industrial production were stable. The Bank noted that inflation was increasing and moving towards the target of 2%. The BOJ said it would continue to expand the monetary base by 60-70 trillion yen per year, and maintain the purchase of government bonds by 50 trillion yen each year.

USD/JPY for Friday, November 8, 2013

USD/JPY November 8 at 10:25 GMT

USD/JPY 98.20 H: 98.25 L: 98.04

USD/JPY Technical

• USD/JPY is showing very little movement in Friday trading, as the pair holds steady in the low-98 range.
• On the downside, 98.15 continues to provide support. This line has weakened as the pair trades at lower levels. The pair is receiving strong support at 97.18.
• On the upside, the pair continues to face resistance at 98.92. This line is followed by the key level of 100, which has held firm since mid-September.
• Current range: 98.15 to 98.92

Further levels in both directions:

• Below: 98.15, 97.18, 96.00, 95.06 and 94.20
• Above: 98.92, 100, 101.19 and 102.53

OANDA’s Open Positions Ratio

USD/JPY ratio has reversed directions on Friday and is pointing to gains in long positions. This is not reflected in the current movement of the pair, which is showing little movement. The ratio continues to be dominated by long positions, indicative of a strong trader bias towards the US dollar moving higher.

The pair is trading quietly in the low-98 range. We could see some activity from the pair during the North American session, with the release of the critical Non-Farm Payrolls and key consumer confidence data.

USD/JPY Fundamentals

• 13:30 US Non-Farm Employment Change. Estimate 121K.
• 13:30 US Unemployment Rate. Estimate 7.3%.
• 13:30 US Average Hourly Earnings. Estimate 0.2%.
• 13:30 US Personal Spending. Estimate 0.3%.
• 13:30 US Core PCE Price Index. Estimate 0.1%.
• 13:30 US Personal Income. Estimate 0.3%.
• 14:55 US Preliminary UoM Consumer Sentiment. Estimate 74.6 points.
• 14:55 US Preliminary UoM Inflation Expectations.
• 18:10 President Barak Obama Speaks.
• 20:30 Fed Chairman Bernard Bernanke Speaks. Bernanke will address an IMF conference in Washington.

*Key releases are highlighted in bold

*All release times are GMT

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.