USD/JPY – Yen yawns as U.S. posts lukewarm employment data

USD/JPY is showing little movement on Friday. In the North American session, the pair is trading at 111.63, up 0.02% on the day. On the release front, Japanese consumer data was mixed. Average Cash Earnings posted a strong gain of 0.9%, well above the forecast of -0.8%. Household spending slowed to 1.7%, shy of the estimate of 1.9%. In the U.S., the focus was on job March job numbers. Nonfarm payrolls came in at 196 thousand, easily beating the estimate of 172 thousand in March. Still, this reading was significantly lower than the December and January releases, both of which were above the 300-thousand level. Wage growth dipped to 0.1%, shy of the estimate of 0.3%.

Japan counts the U.S. and China as two of its major trading partners, so it’s no surprise that Japanese exports have fallen due to trade war between the U.S. and China. This has damaged the manufacturing sector, as underscored by a weak Tankan manufacturing index release for the fourth quarter. The indicator dropped to 12, down from 19 in the third quarter. This marked the weakest score since 2013. However, trade talks between the two super economies have made substantial progress, with reports that an agreement between the world’s two largest economies is 90% complete. The outstanding issues include enforcement mechanisms and the removal of trade tariffs. There has been positive news out of China this week, as manufacturing PMI posted a 14-month high, and the China 50 index has climbed to its highest level since March 2018.

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Thursday (April 4)

• 19:30 Japanese Average Cash Earnings. Estimate 0.9%. Actual -0.8%
• 19:30 Japanese Household Spending. Estimate 1.9%. Actual 1.7%

Friday (April 5)

• 8:30 US Average Hourly Earnings. Estimate 0.2%. Actual 0.1%
• 8:30 US Nonfarm Employment Change. Estimate 172K. Actual 196K
• 8:30 US Unemployment Rate. Estimate 3.8%. Actual 3.8%
• 15:00 US Consumer Credit. Estimate 17.2B

*All release times are DST

*Key events are in bold

USD/JPY for Friday, April 5, 2019

USD/JPY April 5 at 9:25 DST

Open: 111.66 High: 111.83 Low: 111.56 Close: 111.63

USD/JPY Technical

USD/JPY showed limited movement in the Asian session and has posted small gains in European trade

• 110.90 is providing support
• 112.16 is the next resistance line
• Current range: 110.90 to 112.16

Further levels in both directions:

• Below: 110.90, 110.28, 109.37 and 108.11
• Above: 112.16, 112.93 and 113.70

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