USD/JPY Quiet After Strong Employment Data
- Unemployment rate drops to 3.2% in January versus 3.3% expected
- USD/JPY little changed after strong unemployment and job data
- Deflation remains paramount to the Bank of Japan despite strong economic data
USD/JPY today saw a muted reaction after strong labor market data, with the unemployment rate coming in at 3.2 percent. The job-to-applicant ratio increased to 1.28 from 1.27 prior. Despite the positive figures, USD/JPY was little changed following a 0.48% drop after the daily open for February 30th. Prices altogether fell 1.54% from Monday’s open to Tuesday’s current low. This drop came on the heels of an Asian equities sell off after Saturday’s G20 meeting, where global financial leaders failed to deliver on markets hopes for further easing.
The data released today gave little bearing on forward guidance of monetary policy for the Bank of Japan, as employment is not an immediate concern for the central bank. The major issue for Japan remains battling deflation and achieving their 2 percent inflation target. Thus, today’s unemployment figures, although indications of a strong Japanese labor market, had little relevance to the Bank of Japan and their inflation based mandate.
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