USD/JPY – Muted Response to Sharp Unemployment Claims

The Japanese yen is trading quietly in Thursday trading, as USD/JPY trades slightly above the 102 level. In economic news, US Unemployment Claims were solid and easily surpassed expectations. In Japan, BOJ Governor Haruhiko Kuroda spoke at an event in Tokyo. Consumer Confidence continues to drop and Tertiary Industry Activity will be released later in the day.

In the US, Unemployment Claims had another strong release, coming in at 304 thousand. This was well below the estimate of 316 thousand, and marked the second straight week that the key indicator beat the estimate. With the Federal Reserve saying that further trims to QE will depend on the health of the employment market, employment numbers have taken on added significance.

On Wednesday, Federal Reserve chair Janet Yellen said that there is little inflationary pressure on the economy, and it was unlikely that the Fed’s inflation target of 2% would be met. She added that although the economy has showed signs of recovery, unemployment remains a sore spot. The Fed has abandoned its promise to maintain interest rates at least as long as the unemployment rate is above 6.5%, but the dovish stance we are seeing from Yellen means that a rate hike is unlikely in the near future.

Tensions between East and West continue over the volatile situation in Ukraine. There have been several skirmishes between pro-Russian militiamen and Ukrainian forces, and casualties have been reported on both sides. Secretary of State John Kerry and his Russian counterpart are meeting on Thursday, but a quick resolution is unlikely. Western Europe is dependent on Russian oil and gas, so we could see some market movement as the crisis continues.

USD/JPY for Thursday, April 17, 2014

USD/JPY April 17 at 13:15 GMT

USD/JPY 102.14 H: 102.27 L: 101.87

USD/JPY Technical

• USD/JPY edged higher in Asian trading and crossed above the 102 line in the Europe session.
• On the upside, 102.53 continues to provide resistance.
• 101.19 is a strong support level.
• Current range: 101.19 to 102.53

Further levels in both directions:

• Below: 101.19, 100.00, 99.57 and 98.97.
• Above: 102.53, 103.30, 104.17, 105.70 and 106.85.

OANDA’s Open Positions Ratio

USD/JPY ratio is made up of a strong majority of long positions, indicating trader bias towards the dollar moving upwards.

The yen has been trading close to the 102 line on Thursday. USD/JPY has edged higher in the European session.

USD/JPY Fundamentals

• 00:30 BOJ Governor Haruhiko Kuroda Speaks.
• 12:30 US Unemployment Claims. Estimate 316K. Actual 304K.
• 14:00 US Philly Fed Manufacturing Index. Estimate 9.6 points. 
• 14:30 US Natural Gas Storage. Estimate 35B.
• 5:00 Japanese Consumer Confidence. Estimate 40.2 points. Actual 37.5 points.
• 23:50 Japanese Tertiary Industry. Estimate 0.2%.

*Key releases are highlighted in bold

*All release times are GMT

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