Forex - USD/JPY gains on strong U.S. October jobs report

Published 11/02/2012, 02:50 PM
Updated 11/02/2012, 02:51 PM
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Investing.com - The dollar strengthened against the yen on Friday after the U.S. government reported the economy added more payrolls than expected in October.

In U.S. trading on Friday, USD/JPY was trading at 80.42, up 0.37%, up from a session low of 80.20 and off a high of 80.67.

The pair was likely to find support at 80.20, the earlier low, and resistance at 80.67, the earlier high.

The U.S. Bureau of Labor Statistics revealed earlier on Friday that the U.S. economy added 171,000 jobs in October, beating out analysts' calls for a gain of around 125,000, which sparked demand for U.S. assets.

The headline unemployment rate rose to 7.9% from 7.8% in September.

Investors snapped up greenback positions on the news, stopping short, however, of engaging in a full risk-on session.

The economy didn't add enough jobs to reflect a truning point to a more robust U.S. recovery.

Some analysts have said the economy should create at least 250,000  a month on an ongoing basis before recovery really gains steam.

The dollar also saw support on weak Spanish factory data.

The Markit research group reported that Spain's manufacturing purchasing managers' index fell more than expected in October, dropping to 43.5 from a reading 0f 44.6 the previous month.

Analysts were expecting a reading of 44.0.

Meanwhile, Italy's purchasing managers' index fell to 45.50 in October from 45.70 in September, disappointing expectations for a reading of 45.90.

The dollar demand remained firm amid uncertainty surrounding U.S. presidential elections on Tuesday.

Meanwhile, the Bank of Japan decided recently to expand its asset-purchasing program to JPY91 trillion from JPY80 trillion to further stimulate the economy, which bolstered the greenback.

The yen, meanwhile was up against the pound and up against the euro, with GBP/JPY down 0.36% and trading at 128.78 and EUR/JPY trading down 0.59% at 103.08.










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