USD/JPY – Yen Dips as US Employment Report Meets Expectations

The Japanese yen has edged lower in the Wednesday session. In North American trade, USD/JPY is trading at 112.17, down 0.31% on the day. On the release front, there are no major Japanese indicators. In the US, ADP Nonfarm Employment Change slowed to 190 thousand, a shade above the forecast of 189 thousand. On Thursday, the US releases unemployment claims and Japan releases Final GDP for the third quarter.

Bank of Japan Governor Haruhiko Kuroda remains the model of consistency, at least as far as its monetary policy. On Monday, Kuroda reiterated that the BoJ would maintain its ultra-accommodative monetary policy in order “to achieve the 2 percent inflation target as soon as possible”. The BoJ has been forced to constantly lower its inflation projections, yet the Bank has stubbornly stuck to its 2 percent target. Although the labor market remains tight, this has not translated into higher wages for workers, and nervous consumers have held tight to their purse strings, further contributing to a lack of inflation. Kuroda noted that global economic growth had improved, although he sounded a note of concern about President’s Trump isolationist policy, saying that he hoped that global trade would be conducted under the multilateral trading system.

The ADP nonfarm employment report came in as expected, with a gain of 190 thousand. However, this was a substantial drop compared to the previous reading of 235 thousand. Investors are, of course, much more interested in the official nonfarm employment change release, which takes place on Friday. Again, the markets are expecting a soft landing, with a forecast of 200 thousand, down from 261 thousand in the October release. If nonfarm payrolls, one of the most important indicators, is weaker than expected, the US dollar could lose ground. The US will also release a wage growth report on Friday, with the markets expecting a gain of 0.3%.

 

USD/JPY Fundamentals

Wednesday (December 6)

  • 8:15 US ADP Nonfarm Employment Change. Estimate 189K. Actual 190K
  • 8:30 US Revised Nonfarm Productivity. Estimate 3.3%. Actual 3.0%
  •  8:30 US Revised Unit Labor Costs. Estimate +0.2%. Actual -0.2%
  • 9:59 US IBD/TIPP Economic Optimism. Estimate 54.6. Actual 51.9
  • 10:30 US Crude Oil Inventories. Estimate -3.2M. Actual 
  • Tentative – US IBD/TIPP Economic Optimism. Estimate 54.6
  • 10:45 Japanese 30-year Bond Auction

Thursday (December 7)

  • 8:30 US Unemployment Claims. Estimate 241K
  • 18:50 Japanese Final GDP. Estimate 0.4%

*All release times are GMT

*Key events are in bold

 

USD/JPY for Wednesday, December 6, 2017

USD/JPY December 6 at 10:40 EDT

Open: 112.60 High: 112.64 Low: 111.99 Close: 112.17

 

USD/JPY Technical

S3 S2 S1 R1 R2 R3
109.12 110.10 111.53 112.57 113.55 114.59

USD/JPY edged lower in the Asian session. The pair has showed little movement in the European and North American sessions

  • 111.53 is providing support
  • 112.57 is the next resistance line

Current range: 111.53 to 112.57

Further levels in both directions:

  • Below: 111.53, 110.10 and 109.12
  • Above: 112.57, 113.55, 114.59 and 115.50

OANDA’s Open Positions Ratios

USD/JPY ratio is unchanged in the Wednesday session. Currently, long positions have a majority (53%), indicative of trader bias towards USD/JPY reversing directions and moving lower.

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.