USD/JPY – Yen Shrugs off Excellent US Jobless Numbers

The Japanese yen is showing little change on Thursday, as USD/JPY trades in the mid-114 range early in the North American session. On the release front, Japanese Leading Indicators, a minor event, met expectations. In the US, Unemployment Claims beat expectations as it fell to 278 thousand.

An improving US economy has resulted in a stronger labor market, as employment numbers continue to improve. This trend was underscored on Thursday, as Unemployment Claims fell to 278 thousand. This was better than the estimate of 285 thousand and marked a three-week low. This strong figure comes on the heels of the ADP Nonfarm Payrolls report, which climbed to 230 thousand, its strongest showing in 2014. The week wraps up with the official Nonfarm Payrolls release on Friday. The markets are expecting a downturn, with the estimate standing at 229 thousand. Will the key indicator surprise the markets and beat the forecast?

On Thursday, the Bank of Japan released the minutes of its previous policy meeting, which took place last week. That event sent the yen tumbling and the currency has yet to recover. At the meeting, the  BoJ surprised the markets by increasing monetary stimulus from JPY 60-70 trillion to 80 trillion per year. The Bank said that the move was needed to increase inflation, which remains short of the central bank’s target of 2%. The minutes reiterated concern about low inflation, with some Bank board members noting that inflation levels could fall below 1%, due the global slowdown and weak demand from Japanese consumers.

USD/JPY for Thursday, November 6, 2014

USD/JPY November 6 at 15:30 GMT

USD/JPY 114.64 H: 115.51 L: 113.39

USD/JPY Technical

• USD/JY showed some volatility late in the Asian session, testing resistance at 114.65. Otherwise, the pair has been very quiet, showing little change on the day.
• On the upside, 114.65 remains fluid and will likely see more action during the North American session. 115.75 is stronger.
• 113.68 is providing strong support.
• Current range: 113.68 to 114.65

Further levels in both directions:

• Below: 113.68, 112.94, 110.68, 109.82 and 108.58
• Above: 114.65, 115.75, 116.66 and 117.94

OANDA’s Open Positions Ratio

USD/JPY is almost unchanged on Thursday. This is consistent with the lack of movement which has characterized the pair for most of the day. The ratio currently has a majority of long positions, indicative of trader bias towards USD/JPY breaking out of range and moving upwards.

USD/JPY Fundamentals

• 5:00 Japanese Leading Indicators. Estimate 105.5%. Actual 105.6%.
• 12:30 US Challenger Job Cuts. Actual 11.9%.
• 13:30 US Unemployment Claims. Estimate 285K. Actual 278K.
• 13:30 US Preliminary Nonfarm Productivity. Estimate 0.9%. Actual 2.0%.
• 13:30 US Preliminary Unit Labor Costs. Estimate 1.0%. Actual 0.3%.
• 15:30 US Natural Gas Storage. Estimate 86B. Actual 91B.
• 18:30 US FOMC Member Jerome Powell Speaks.

*Key releases are highlighted in bold

*All release times are GMT

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