oanda_logo
  • Sign in
  • Open an account

Sign in

Select account:

  • Currency converter
    • Converter
    • Tools
    • Mobile
    • Live rates
    • Historical rates
    • Embed converter
    • Help
  • FX Data Services
    • FX Data Services overview
    • Exchange Rates API
    • Corporate FX transfers
    • Historical currency converter
    • Contact us
    • Blog
  • OANDA Group
    • About OANDA
    • Media centre
    • Careers
Logotype
The Beat of the Global Markets
  • Home
  • News Events
    • Brexit
    • COVID-19
    • Earnings season
    • Non-farm payrolls
    • Trade war
    • US election
  • Markets
    • FX
    • Indices
    • Commodities
    • Crypto
  • Multimedia
    • Podcasts
    • Videos
  • Economic calendar
  • Analysts
Home/FX/Newsfeed

USD/JPY – Yen Unchanged, Markets Await Nonfarm Payrolls Report

July 8, 2016 Share Print 0

The Japanese yen is showing little movement on Friday, as USD/JPY remains within striking distance of the symbolic 100 level. In the European session, USD/JPY is trading at 100.60. On the release front,  Japanese Current Account dropped to JPY 1.42 trillion, short of expectations. In the US, employment indicators will be in the spotlight, with the release of three key events – Nonfarm Payrolls, Average Hourly Earnings and the Unemployment Rate. Any unexpected readings could lead to volatility from USD/JPY.

Japanese Current Account disappointed on Thursday. The surplus dropped to JPY 1.41 trillion in May, the weakest reading since September 2015. The figure was also well off the forecast of JPY 1.52 trillion. Still, the Japanese yen shrugged off the soft release. The strong yen has taken advantage of the Brexit referendum, which saw Britain vote to exit the European Union. The yen has posted strong gains of 3.5 percent since Brexit, as jittery investors have dumped risk assets in favor of the safe-haven Japanese currency. Brexit aftershocks are far from over, as underscored by the woeful British pound, which is struggling at 30-year lows. With risk sentiment decidedly negative, the yen could break below the symbolic 100 level, which last occurred just after the Brexit vote in late June. Although the Bank of Japan has been reluctant to adopt further easing measures, it may have to act in order to curb a streaking yen which is hurting the export sector. Japanese officials have repeatedly warned against what they have termed “currency manipulations” and have threatened to intervene if the yen continues to move higher. We can expect more hawkish statements out of Japan if the yen breaks below the key 100-level.

US job data looked impressive on Thursday. ADP Nonfarm Employment Change was almost unchanged in June, with a reading of 172 thousand. This figure was well above the forecast of 158 thousand. This was followed by a solid unemployment claims release, as the indicator dropped to 254 thousand, marking an 11-week low. All eyes are now on the official Nonfarm Payrolls report which will be released on Friday. A strong release would confirm that the labor market is improving and job creation is gaining steam. The markets will also be keeping a close look at the unemployment rate and Average Hourly wages, which will be released later today.

There were no surprises in the Federal Reserve minutes, released earlier this week. In the June policy meeting, policymakers expressed concerns about a slowdown and hiring and the health of the US economy, and the underlying tone was one of prudence and caution. The June meeting took place just one week before the Brexit referendum vote, and in the minutes showed that Fed policymakers adopted a “wait and see” attitude about Brexit. The vote by Britain to leave the EU stunned the markets, causing turmoil in the markets and sending bond yields to record lows. The minutes indicated that Fed members projected two rate increases before the end of the year, but that forecast is likely out-of-date following the shock waves from the Brexit earthquake. Given the current economic climate, the markets are pessimistic about any rates moves before 2017. Investors have priced in no chance of a rate increase at the next Fed meeting on July 26-27, and just an eight percent chance of a hike in 2016. However, if US employment and inflation numbers improve in the second half of the year, the likelihood of a rate hike will certainly increase.

USD/JPY Fundamentals

Thursday (July 7)

19:50 Japanese Current Account. Estimate 1.52T. Actual 1.41T

Friday (July 8)

  • 8:30 US Average Hourly Earnings. Estimate 0.2%
  • 8:30 US Nonfarm Employment Change. Estimate 175K
  • 8:30 US Unemployment Rate. Estimate 4.8%
  • 15:00 US Consumer Credit. Estimate 16.7B

*Key events are in bold

*All release times are EDT

USD/JPY for Friday, July 8, 2016

USD/JPY July 8 at 4:35 EDT

Open: 100.76 Low: 100.22  High: 100.97 Close: 100.65

USD/JPY Technical

S3 S2 S1 R1 R2 R3
97.78 98.88 99.71 101.07 102.36 103.73
  • USD/JPY posted losses in the Asian session but has recovered in European trade
  • 0.9971 is providing support
  • 101.07 is a weak resistance line
  • Current range: 99.71 to 101.07

Further levels in both directions:

  • Below: 99.71, 98.88 and 97.78
  •  Above: 101.07, 102.36, 103.73 and 104.99

OANDA’s Open Positions Ratio

The USD/JPY ratio is almost unchanged on Friday, consistent with the lack of movement from USD/JPY. Long positions retain a strong majority (69%), indicative of trader bias towards USD/JPY breaking out and moving higher.

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.

  • Bio
  • Google+
  • Latest Posts
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.
Kenny Fisher

+Kenny Fisher

Kenny Fisher

Latest posts by Kenny Fisher (see all)

  • Higher US yields send Aussie sliding - 02/26/2021
  • Australian dollar flirting with 80 - 02/25/2021
  • NZ dollar pauses after huge gains - 02/25/2021
FX, Japanese Current Account, jpy, US Average Hourly Earnings, US Consumer Credit, US Nonfarm Employment Change, US Unemployment Rate, usd, USD/JPY
Back to Top
Subscribe
Subscribe form
Week ahead
Week Ahead – Rising yields spook markets
Posted by Craig Erlam Feb 26, 2021
FX
USD/CAD – Heading For a Correction?
Posted by Craig Erlam Feb 26, 2021
Higher US yields send Aussie sliding
Posted by Kenny Fisher Feb 26, 2021
The US dollar flexes its muscles
Posted by Jeffrey Halley Feb 26, 2021
Indices
US yields send Asian equities lower
Posted by Jeffrey Halley Feb 26, 2021
Asia follows Wall Street with strong gains
Posted by Jeffrey Halley Feb 25, 2021
Asia equities mixed after Powell
Posted by Jeffrey Halley Feb 24, 2021
Commodities
Oil dips, gold slide continues
Posted by Craig Erlam Feb 26, 2021
Oil loses ground, gold slide continues
Posted by Jeffrey Halley Feb 26, 2021
Oil higher, gold’s woes
Posted by Ed Moya Feb 25, 2021
Crypto
Commodities and Cryptos: Winter Freeze pumps oil, Gold’s d...
Posted by Ed Moya Feb 16, 2021
Commodities and Cryptos: Crude’s upbeat demand outlook, Go...
Posted by Ed Moya Feb 12, 2021
Bitcoin aiming high
Posted by Craig Erlam Feb 12, 2021
Follow us
  • RSS
  • Facebook
  • Twitter
  • Google

Logotype

MarketPulse provides up-to-the-minute analysis on forex, commodities and indices from around the world.

  • OANDA Group
  • FX Data Services
  • Currency conversion
  • News events
  • Markets
  • Economic calendar
  • About MarketPulse
  • Terms of use
  • Site map
MarketPulse is an award-winning news site that delivers round-the-clock commentary on a wide range of asset classes, as well as in-depth insights into the major economic trends and events that impact the markets. The content produced on this site is for general information purposes only and should not be construed to be advice, invitation, inducement, offer, recommendation or solicitation for investment or disinvestment in any financial instrument. Opinions expressed herein are those of the authors and not necessarily those of OANDA or any of its affiliates, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, please access the RSS feed or contact us at info@marketpulse.com © 2020 OANDA Business Information & Services Inc.