Yen Little Changed as Unemployment Rate Drops to a 21-Year Low
- Yen little changed against its major counterparts after employment data
- Japanese jobless rate declined to 3.0 percent versus 3.1 percent expected
- Friday’s US non-farm payrolls could potentially provide more volatility
Keep an eye on short-term trends for Yen crosses using the Grid Sight Index (GSI) here.
The Yen showed a reserved reaction against its major peers after Japan’s employment report crossed the wires. The unemployment rate declined to 3.0 percent in July versus 3.1 percent expected and 3.1 percent in June. This marks the lowest jobless reading since May 1995, a 21-year low. Simultaneously, the job-to-applicant ratio held steady at 1.37 versus 1.38 estimated, its highest point since 1991.
As Quantitative Strategist David Rodriguez mentioned, it would take an especially large surprise out of this jobs report to force a meaningful reaction out of the Yen as the threat of additional Bank of Japan easing rings hollow. However, this week’s US nonfarm payrolls report could adjust Fed rate hike bets and in turn, offer volatility for USD/JPY.
Meanwhile, the DailyFX Speculative Sentiment Index (SSI) is showing a reading that roughly 75 percent of open speculative retail positions in USD/JPY are long. The SSI is typically a contrarian indicator, implying further USD/JPYweakness ahead.
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