USD/JPY – Little Movement As Markets Eye Unemployment Claims

USD/JPY has edged upwards in Thursday trading, as the pair trades just above the 105 line. In the US, ADP Non-Farm Payrolls looked excellent, climbing to a two-year high. Unemployment Claims will be released later on Thursday and the markets are expecting another strong reading. There are no Japanese releases on Thursday.

US employment releases started 2014 on a positive note, as ADP Non-Farm Payrolls looked excellent in December. The key indicator climbed to 238 thousand, up from 215 thousand a month ago. This easily surpassed the estimate of 199 thousand and was the best reading we’ve seen since December 2011. We’ll get a look at Unemployment Claims later on Thursday, followed by the all-important Non-Farm Payrolls on Friday. With another QE taper in January a strong possibility, every employment release will be under the market microscope and could impact on the currency markets.

What can we expect in 2014? The BOJ is forecasting economic growth this year while inflation is anticipated to reach 1.3%. However, there is concern that these predictions may not be met, given the sales tax increase set for April, which will be raised to 8%, up from the current 5%. We can expect the BOJ to continue its aggressive monetary stance, given that one of its primary goals is to reach its inflation target of 2%. As for the struggling Japanese yen, some analysts are predicting the USD/JPY could hit as high as 120 in 2014.

USD/JPY for Thursday, January 9, 2014

USD/JPY January 9 at 13:00 GMT

USD/JPY 104.99 H: 104.06 L: 104.74

USD/JPY Technical

• USD/JPY has posted very slight gains in Thursday trading. The pair touched a low of 1.0474 in the Asian session but has moved back up to the 105 line.
• 104.17 continues to provide strong support. This is followed by a support line at 103.30.
• On the upside, there is resistance at 105.70. This is followed by a resistance line at 106.85, which has remained intact since September 2008.
• Current range: 104.17 to 105.70

Further levels in both directions:

• Below: 104.17, 103.30, 102.53, 101.19 and 100.00
• Above: 105.70, 106.85, 107.73 and 108.77

OANDA’s Open Positions Ratio

USD/JPY ratio is unchanged on Thursday, continuing the trend we saw a day earlier. This is consistent with what we are seeing from the pair, which is not showing much activity. Long positions have a majority in the USD/JPY ratio, indicating trader bias towards the dollar moving higher.

The pair is trading close to the 105 line in Thursday trading. We could see some volatility in the North American session, as the US releases the all-important Unemployment Claims later in the day.

USD/JPY Fundamentals

• 12:30 US Challenger Job Cuts. Actual -5.9%.
• 13:30 US Unemployment Claims. Estimate 337K.
• 15:30 US Natural Gas Storage. Estimate -147B.
• 18:01 US 30-year Bond Auction.

*Key releases are highlighted in bold

*All release times are GMT

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