USDJPY drops on the Increased Jobless Claims
THE TAKEAWAY: [U.S. Initial Jobless Claims rose to 336,000; Continuing Claims increased to 3,053,000] > [Labor market is picking up, while Fed seeks for sustained improvement] > [USDJPY Bearish]
Applications for unemployment insurance payments rose less than expected in the week ended March 21, adding more signs to the recent recovery in the U.S. labor market. According to a report issued by Labor Department in Washington today, jobless claims increased 2,000 to 336,000 unexpectedly. Initial claims from two week ago were revised upwardly to 334,000 from an initially reported 332,000. Economists polled by Bloomberg News had forecasted a rise to 340,000. Meanwhile, the continuing claims climbed to 3,053,000, well above the forecast.
Although the amount of Americans filling claims increased slightly than in previous report, the monthly average, which smoothes the week-to-week volatility, fell to the lowest level since February 2008. As Fed’s Bernanke mentioned yesterday in a press conference, the Jobless Claims is used as one of the indicator to adjust quantitative easing policy. Yet, a strong data is not enough. The central bank seeks for sustained improvements in labor market and will revise monetary stimulus accordingly.
USDJPY 1-minute Chart: March 21, 2013
Chart created using Marketscope 2.0– Prepared by Renee Mu
In the minutes following the data release, the U.S. dollar dropped against its Japanese counterparty, with USDJPY falling 5 pips to 95.33 yen. At the time of this report was written, the USDJPY was trading lower at 95.23 yen.
--- Written by Renee Mu DailyFX Research
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