USD/JPY is showing little movement on Monday as the pair trades at 103.50. On the release front, it’s a quiet day as the US markets are closed for Columbus Day. Japanese markets are also closed on Monday for a holiday. Later on, (Tuesday in Japan), Japan will release Current Account, with the markets expecting the surplus to climb to 1.58 trillion.
The yen continues to lose ground, in response to remarks from Bank of Japan Governor Haruhiko Kuroda on the weekend. Kuroda stated that the BoJ is unlikely to meet its 2 percent inflation target until 2018, rather than in 2017. Kuroda added that the BoJ had no intention of changing course, saying it would continue or even strengthen monetary easing in order to achieve its inflation target. The markets appear to be taking Kuroda’s monetary message more seriously, as the broad hint of further easing has weakened the Japanese currency. Last week, the yen pushed across the 104 line for the first time since early September and the downward trend could continue this week.
US employment numbers for September were mixed on Friday. Nonfarm payrolls, one of the most closely watched indicators, rose slightly to 156 thousand. Although this was well short of the forecast of 171 thousand, the markets do not appear overly concerned, as other employment indicators were steady. Average Hourly Wages edged up to 0.2%, matching the forecast. The unemployment edged up to 5.0%, just above the forecast of 4.9%. As well, the labor force participation rate ticked higher. Unemployment claims sparkled last week, dropping to just 249 thousand, beating the estimate of 255 thousand. Unemployment claims have come in below the forecast for 10 straight weeks, pointing to a tight labor market. Jobless filings have been below 300,000 for 83 straight weeks, marking the longest streak since 1970. Overall, September employment numbers were decent and the likelihood of December rate has actually risen slightly since Friday, from 63 percent to 66 percent.
Monday (October 11)
- 19:50 Japanese Current Account. Estimate 1.58T
*All release times are EDT
*Key events are in bold
USD/JPY for Monday, October 10, 2016
USD/JPY October 10 at 10:10 EDT
Open: 103.04 High: 103.49 Low: 102.80 Close: 103.47
- USD/JPY posted small losses in the Asian session. The pair reversed directions and posted considerable gains in the European session
- There is resistance at 104.32
- 103.02 is providing support
- Current range: 103.02 to 104.32
Further levels in both directions:
- Below: 103.02, 102.36, 101.20 and 100.55
- Above: 104.32, 105.44 and 106.72
OANDA’s Open Positions Ratio
USD/JPY ratio is unchanged in the Monday session, consistent with the lack of movement from USD/JPY. Currently, long positions have a small majority (53%), indicative of slight trader bias towards USD/JPY breaking out and moving higher.
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