The Japanese yen is trading quietly in Thursday trading, as USD/JPY trades slightly above the 102 level. In economic news, US Unemployment Claims were solid and easily surpassed expectations. In Japan, BOJ Governor Haruhiko Kuroda spoke at an event in Tokyo. Consumer Confidence continues to drop and Tertiary Industry Activity will be released later in the day.
In the US, Unemployment Claims had another strong release, coming in at 304 thousand. This was well below the estimate of 316 thousand, and marked the second straight week that the key indicator beat the estimate. With the Federal Reserve saying that further trims to QE will depend on the health of the employment market, employment numbers have taken on added significance.
On Wednesday, Federal Reserve chair Janet Yellen said that there is little inflationary pressure on the economy, and it was unlikely that the Fed's inflation target of 2% would be met. She added that although the economy has showed signs of recovery, unemployment remains a sore spot. The Fed has abandoned its promise to maintain interest rates at least as long as the unemployment rate is above 6.5%, but the dovish stance we are seeing from Yellen means that a rate hike is unlikely in the near future.
Tensions between East and West continue over the volatile situation in Ukraine. There have been several skirmishes between pro-Russian militiamen and Ukrainian forces, and casualties have been reported on both sides. Secretary of State John Kerry and his Russian counterpart are meeting on Thursday, but a quick resolution is unlikely. Western Europe is dependent on Russian oil and gas, so we could see some market movement as the crisis continues.
USD/JPY 102.14 H: 102.27 L: 101.87
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