The Japanese yen continues to lose ground on Tuesday, as USD/JPY trades in the high-116 range. On the release front, Japan will release Tertiary Industry Activity. The markets are expecting good news, with an estimate of 0.9%. In the US, banks will be closed for Veterans Day, so traders can expect reduced liquidity in the currency markets.
Japanese Current Account looked solid, as the current account surplus improved to JPY 0.41 trillion. This easily beat the estimate of JPY 0.03 trillion and marked the highest surplus since August 2013. Despite the good news, the yen continues to slide, surrendering a remarkable 800 points in just two weeks. USD/JPY is close to seven-year highs, and with the BoJ increasing stimulus, the yen’s disappearing act could well continue.
Employment numbers have been strong in the US, and this played a major role in the Fed decision to wind up QE last week. However, US Nonfarm Payrolls, the most important employment indicator, disappointed on Friday. The indicator slipped to 214 thousand, well short of the estimate of 235 thousand. On a brighter note, the unemployment rate slipped to 5.8%, its lowest level in six years. On Thursday, Unemployment Claims fell to 278 thousand. This was better than the estimate of 285 thousand and marked a three-week low.
USD/JPY 115.92 H: 116.10 L: 114.64
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