Yen Unexcited by In-Line Labor Cash Earnings, US Jobs Data Ahead
- In-line labor cash earnings did little to excite USD/JPY market movement
- Labor cash earnings 0.2% y/y vs 0.2% expected and 0.1% y/y previously
- All eyes seemingly on tomorrow’s United States non-farm payrolls release
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The Japanese Yen offered a mild reaction to the US Dollar as in-line labor cash earnings data dropped ahead of tomorrow’s US non-farm payrolls release. Labor cash earnings for Japan crossed the wires at 0.2 percent y/y versus 0.2 percent expected and 0.1 percent y/y recorded previously.
As a reflection of domestic consumer’s ability to spend, rising labor cash earnings have the potential to accelerate inflation in the Japanese economy. Therefore, a higher reading might be seen as potentially bullish for the yen, and a lower reading more bearish. However, with the BOJ seemingly committed to a firmly dovish posture, this may not be the case in practice.
Besides limited implications for monetary policy, the lackluster reaction may have also reflected caution ahead of upcoming event risk out of the United States. On Friday at 13:30 GMT, the US will release its official employment data for December. The outcome may play a key role in the convergence of market and official forecasts for Fed policy, so traders will almost certainly pay attention.
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