Forex: USD/JPY – Settled at highs

NVEZZ.com Friday July 5th: The dollar firmed against the yen after the US labour market releases for June came out at 13:30 BST today. Barely 15 minutes later, the pair rose to 101.13, a level last seen in May and still the high for the day.

The US Department of Labor reported that an additional 195,000 non-farm jobs were registered in June, matching May’s revised figure. The gain was well in excess of analysts’ expectations for 165,000.
Unemployment remained unchanged at 7.6 percent in June, versus expectations for a modest fall to 7.5 percent.

Today’s numbers are supported by Wednesday’s news that the US private sector added 188,000 jobs in June, more than expectations for an increase of 160,000.

While the US trade deficit has disappointed the market this week, rising to $45 billion dollars and well above the expected $40.3 billion, the labour data has given grounds for supposing that, although the unemployment rate remains well away from the Fed’s 6.5 percent target, conditions are starting to form for the tapering of QE presaged by Fed chairman Bernanke back on 19 June.

Meanwhile in Japan, early in today’s Asian session today, a preliminary reading of the Leading Economic Index showed an increase to 110.5 points in May from an upwardly revised 107.7 in April. And the preliminary Coincident Index rose by 0.8 percent to 105.9 points from April’s 105.1.
An update on Japan’s foreign currency reserves released by the Ministry of Finance reported $1,239 billion as of June 30, down $115 billion on May.