Investing.com - The U.S. dollar traded sharply higher against the Japanese yen during Thursday’s Asian session as traders digested some slack U.S. jobs data while mulling a future sales tax increase in Japan.
In Asian trading Thursday, USD/JPY jumped 0.36% to 97.71. The pair was likely to find support at 96.82, the low from Aug. 27, and resistance at 98.72, Monday's high.
Prime Minister Shinzo Abe confirmed the sales tax hike from 5% to 8% for April 2014 but made no mention of a corporate tax cut that was supposed to compensate for the potential negative impact of the sales tax increase on the economy. Japanese stocks sold off in reaction to the announcement, as hiring and business investment could see a slowdown in the coming months.
Over in the United States, the government shutdown extended for another day since Republicans and Democrats continued to argue about healthcare spending. No compromise has been reached yet, which means another day of furloughs and no income for government employees in non-essential services.
Data from the U.S. has also disappointed, with the ADP private payrolls report showing a mere 166K increase in hiring, lower than the estimate of a 177K rise for September. The August figure was revised down from an initial estimate of 176K to 159K, reflecting poorer hiring conditions in the past couple of months.
Soft economic data from the U.S. prompted traders to speculate that the Federal Reserve will keep its bond purchases unchanged for the rest of the year, as a taper in October might be less likely.
Elsewhere, NZD/JPY rose 0.06% to 81.14 while EUR/JPY climbed 0.54% to 132.94.
In Asian trading Thursday, USD/JPY jumped 0.36% to 97.71. The pair was likely to find support at 96.82, the low from Aug. 27, and resistance at 98.72, Monday's high.
Prime Minister Shinzo Abe confirmed the sales tax hike from 5% to 8% for April 2014 but made no mention of a corporate tax cut that was supposed to compensate for the potential negative impact of the sales tax increase on the economy. Japanese stocks sold off in reaction to the announcement, as hiring and business investment could see a slowdown in the coming months.
Over in the United States, the government shutdown extended for another day since Republicans and Democrats continued to argue about healthcare spending. No compromise has been reached yet, which means another day of furloughs and no income for government employees in non-essential services.
Data from the U.S. has also disappointed, with the ADP private payrolls report showing a mere 166K increase in hiring, lower than the estimate of a 177K rise for September. The August figure was revised down from an initial estimate of 176K to 159K, reflecting poorer hiring conditions in the past couple of months.
Soft economic data from the U.S. prompted traders to speculate that the Federal Reserve will keep its bond purchases unchanged for the rest of the year, as a taper in October might be less likely.
Elsewhere, NZD/JPY rose 0.06% to 81.14 while EUR/JPY climbed 0.54% to 132.94.