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Forex - USD/JPY drops on soft U.S. private-sector jobs report

Published 10/02/2013, 02:59 PM
Updated 10/02/2013, 03:00 PM
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Investing.com - The dollar fell against the yen on Wednesday after a U.S. private-sector jobs report came in weaker than expected and renewed expectations that the Federal Reserve will keep ultra-loose monetary policies in place for longer than once expected.

In U.S. trading on Wednesday, USD/JPY was trading at 97.40, down 0.64%, up from a session low of 97.15 and off a high of 98.09.

The pair was likely to find support at 96.82, the low from Aug. 27, and resistance at 98.72, Monday's high.

Payroll processing firm ADP said earlier that U.S. non-farm private employment rose by a seasonally adjusted 166,000 in September, missing expectations for an increase of 180,000.

July's figure was revised down to a gain of 159,000 from 176,000.

The numbers softened the greenback by keeping expectations alive that the Federal Reserve will continue stimulating the economy with its monthly USD85 billion in asset purchases — possibly through December — which weaken the dollar by driving down interest rates to spur recovery.

Elsewhere, a U.S. government shutdown ran into its second day on Wednesday due to an inability among lawmakers to approve a spending package.

Concerns the shutdown will mean the official September jobs report won't publish Friday pushed the ADP report into the limelight, weakening the dollar as the report became the de facto official data in the eyes of investors on Wednesday.

The yen, meanwhile, was up against the pound and down against the euro, with GBP/JPY down 0.48% and trading at 158.01 and EUR/JPY trading down 0.20% at 132.29.

The euro, meanwhile, found support after Italian Prime Minister Enrico Letta survived a vote of confidence in parliament on Wednesday after Silvio Berlusconi backtracked in his opposition to the coalition.

The single currency also rose after the European Central Bank left interest rates unchanged at 0.50%.

On Thursday, the U.S. is scheduled to release its weekly government report on initial jobless claims along with data on factory orders. 

Meanwhile, the ISM is to produce a report on non-manufacturing activity, a leading economic indicator.








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