USD/JPY: Dollar Firm Ahead of Unemployment Claims

 | Apr 03, 2014 10:57AM ET

The USD/JPY remains at high levels as the pair trades just shy of the 104 line on Thursday. On the release front, there are three key events on the schedule - Unemployment Claims, Trade Balance and the ISM Non-manufacturing PMI. There are no Japanese releases on Thursday.

US employment releases started the week on the right foot, as, ADP Nonfarm Payrolls continues to climb. The key indicator jumped to 191 thousand in February, up from 139 thousand a month earlier. This practically matched the estimate of 192 thousand. The markets will get a good look at the US employment picture, with Unemployment Claims on Thursday, and the Unemployment Rate and NFP wrapping things up on Friday.

Japanese Tankan indexes are important indices which provide a glimpse of the health of the Japanese economy. The releases were a mix in February, and the yen did not show much reaction. The Manufacturing Index rose slightly to 17 points, falling short of the estimate of 19 points. However, the Non-Manufacturing Index showed a significant upturn, jumping to 24 points from 20 points a month earlier, matching the forecast. On Monday, Preliminary Industrial Production starting off the week with a whimper, declining 2.3% in February, an eight-month low.

Earlier in the week, Fed chair Janet Yellen said that inflation and employment levels needed to improve considerably, and the Federal Reserve would continue to provide monetary stimulus for some time. Currently, the Fed is purchasing $55 billion in assets under its QE scheme. There have been three tapers to QE so far, and Yellen plans to wind up the program in the fall, provided that the US economy does not run into any serious turbulence. At the same time, the Federal Reserve has stated that it has no plans to raise interest rates until sometime in 2015.

 

USD/JPY for Thursday, April 3, 2014