USD/JPY – Yen Posts Gains as US Unemployment Claims Jumps

The Japanese yen continues to move higher, as the USD/JPY trades in the high-116 range on Thursday. On the release front, Japanese Core Machinery Orders improved to 1.3%, but this was well below expectations. Later today, Japan will release Tertiary Industry Activity. The markets are expecting a gain of 0.3%. In the US, Unemployment Claims was unexpectedly weak, jumping to 316 thousand. PPI posted a decline of 0.3%, matching the forecast. The Empire State Manufacturing Index rose to 10.3 points and we’ll get a look at the Philly Fed Manufacturing Index later in the day.

US employment numbers slipped on Thursday, as Unemployment Claims surprised with a reading of 316 thousand. This was well above the estimate of 299 thousand and was the highest reading since June 2014. However, the first full week of the year often shows a spike in claims, since holiday workers are dismissed, resulting in a higher number of claims. Earlier in the week, JOLTS Jobs Openings climbed to 4.97 million, easily beating the forecast of 4.86 million. This is the indicator’s highest level since January 2001. The strong employment numbers are a welcome result of the robust economy, as the deepening recovery fuels demand for more workers. The health of the labor market is an important component of any decision to raise interest rates, so upcoming employment releases will be under the market microscope as the Fed mulls when to raise interest rates.

Earlier in the week, US retail sales caught the markets off guard with sharp declines in the December readings. Core Retail Sales came in at -1.0%, while Retail Sales followed suit with a loss of 0.9%. Both key indicators recorded their worst showings since May 2010. However, retail sales were solid in the past two months, so the numbers for Q4 will be in positive territory.

USD/JPY for Thursday, January 15, 2015

USD/JPY January 15 at 13:55 GMT

USD/JPY 116.84 H: 117.94 L: 116.25

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
113.64 115.56 116.69 117.94 118.69 119.83

 

  • USD/JPY was steady in the Asian session. The pair posted losses in the European session, testing support at 116.89.
  • 116.69 continues to see action and is currently a weak support line. 115.56 is stronger.
  • 117.94 is a strong resistance line.
  • Current range: 116.69 to 117.94

Further levels in both directions:

  • Below: 116.69, 115.56, 113.64, 112.41 and 110.11
  • Above: 117.94, 118.69, 119.83 and 120.63

 

OANDA’s Open Positions Ratio

USD/JPY ratio has a majority of long positions, indicative of trader bias towards the dollar reversing its current slide and moving to higher ground.

USD/JPY Fundamentals

  • 13:30 US PPI. Estimate -0.3%. Actual -0.3%.
  • 13:30 US Unemployment Claims. Estimate 299K. Actual 316K.
  • 13:30 US Core PPI. Estimate 0.2%. Actual 0.3%.
  • 15:00 US Empire State Manufacturing Index. Estimate 5.3 points. Actual 10.0 points.
  • 15:00 US Philly Fed Manufacturing Index. Estimate 20.3K.
  • 15:30 US Natural Gas Storage. Estimate -224B.
  • 23:50 Japanese Tertiary Industry Activity. Estimate 0.3%.

*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.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.