Investing.com - The U.S. dollar was lower against the yen on Friday, as concerns that the financial crisis in the euro zone is deepening overshadowed better-than-expected U.S. employment data and supported safe haven demand.
USD/JPY hit 76.60 on Wednesday, the pair’s lowest since November 18; the pair subsequently consolidated at 76.95 by close of trade on Friday, unchanged on the week.
The pair is likely to find support at 76.60, Wednesday’s low and a six-week low and resistance at 77.23, Thursday’s high.
On Friday, the U.S. Department of Labor said nonfarm payrolls increased by 200,000 in December from a downwardly revised 100,000 the previous month and surpassing expectations for a 150,000 increase. The unemployment rate unexpectedly fell to 8.5%, the lowest level since February 2009.
The strong data underlined the divergence between the embattled euro zone and the more buoyant U.S. economy.
Meanwhile, the euro dropped to an 11-year low against the yen amid concerns over the sovereign funding needs of euro zone states on Thursday, after France sold EUR4.02 billion of 10-year bonds in an auction which met with solid demand but at higher yields.
France is seen as vulnerable to losing its triple-A credit rating in the coming weeks, after it was put on negative watch by ratings agencies Standard & Poor’s and Fitch’s in December, amid concerns over the handling of the financial crisis in the euro zone.
The French auction came one day after an auction of German 10-year government debt which encountered lower than average investor demand.
Meanwhile, fears over the strength of the euro zone’s banking sector intensified after a report on Thursday showed that overnight deposits at the European Central Bank reached a new record high of EUR455 billion, indicating that European banks remain unwilling to lend to each other.
Elsewhere, Italian 10-year bond yields remained close to the critical 7% threshold, seen as unsustainable in the long term, despite ongoing bond purchases by the ECB.
On Friday, Japanese Finance Minister Jun Azumi warned that the euro’s increasing weakness against the yen is a threat to Japan’s economy and should be carefully monitored.
In the week ahead, investors will be closely watching a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel on Monday for any signs of progress in resolving the region’s two-year old debt crisis.
Meanwhile, France, Greece, Germany, Italy and Spain are all scheduled to hold auctions of government debt.
Also next week, the U.S. is to publish official data on retail sales and consumer sentiment.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 9
Markets in Japan will be closed for a national holiday.
In the U.S., Federal Open Market Committee member Dennis Lockhart is to speak.
Tuesday, January 10
In the U.S., FOMC members John Williams and Sandra Pianalto are to speak.
Wednesday, January 11
The U.S. is to produce official data on crude oil stockpiles, while the Federal Reserve is to release its Beige Book. In addition, FOMC member Dennis Lockhart is to speak.
Japan is to publish an index of leading economic indicators.
Thursday, January 12
The Bank of Japan is to publish a report on bank lending. The country is also to publish preliminary data on machine tool orders, as well as data on the current account.
The U.S. is to release official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity, as well as data on initial jobless claims. The U.S. is also to publish government data on business inventories, a signal of future business spending and a report on the federal budget balance.
Friday, January 13
The U.S. is to round up the week with data on the trade balance, as well as government data on import prices. In addition, the University of Michigan is to release preliminary data on inflation expectations and consumer sentiment, a leading indicator of consumer spending.
USD/JPY hit 76.60 on Wednesday, the pair’s lowest since November 18; the pair subsequently consolidated at 76.95 by close of trade on Friday, unchanged on the week.
The pair is likely to find support at 76.60, Wednesday’s low and a six-week low and resistance at 77.23, Thursday’s high.
On Friday, the U.S. Department of Labor said nonfarm payrolls increased by 200,000 in December from a downwardly revised 100,000 the previous month and surpassing expectations for a 150,000 increase. The unemployment rate unexpectedly fell to 8.5%, the lowest level since February 2009.
The strong data underlined the divergence between the embattled euro zone and the more buoyant U.S. economy.
Meanwhile, the euro dropped to an 11-year low against the yen amid concerns over the sovereign funding needs of euro zone states on Thursday, after France sold EUR4.02 billion of 10-year bonds in an auction which met with solid demand but at higher yields.
France is seen as vulnerable to losing its triple-A credit rating in the coming weeks, after it was put on negative watch by ratings agencies Standard & Poor’s and Fitch’s in December, amid concerns over the handling of the financial crisis in the euro zone.
The French auction came one day after an auction of German 10-year government debt which encountered lower than average investor demand.
Meanwhile, fears over the strength of the euro zone’s banking sector intensified after a report on Thursday showed that overnight deposits at the European Central Bank reached a new record high of EUR455 billion, indicating that European banks remain unwilling to lend to each other.
Elsewhere, Italian 10-year bond yields remained close to the critical 7% threshold, seen as unsustainable in the long term, despite ongoing bond purchases by the ECB.
On Friday, Japanese Finance Minister Jun Azumi warned that the euro’s increasing weakness against the yen is a threat to Japan’s economy and should be carefully monitored.
In the week ahead, investors will be closely watching a meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel on Monday for any signs of progress in resolving the region’s two-year old debt crisis.
Meanwhile, France, Greece, Germany, Italy and Spain are all scheduled to hold auctions of government debt.
Also next week, the U.S. is to publish official data on retail sales and consumer sentiment.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 9
Markets in Japan will be closed for a national holiday.
In the U.S., Federal Open Market Committee member Dennis Lockhart is to speak.
Tuesday, January 10
In the U.S., FOMC members John Williams and Sandra Pianalto are to speak.
Wednesday, January 11
The U.S. is to produce official data on crude oil stockpiles, while the Federal Reserve is to release its Beige Book. In addition, FOMC member Dennis Lockhart is to speak.
Japan is to publish an index of leading economic indicators.
Thursday, January 12
The Bank of Japan is to publish a report on bank lending. The country is also to publish preliminary data on machine tool orders, as well as data on the current account.
The U.S. is to release official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity, as well as data on initial jobless claims. The U.S. is also to publish government data on business inventories, a signal of future business spending and a report on the federal budget balance.
Friday, January 13
The U.S. is to round up the week with data on the trade balance, as well as government data on import prices. In addition, the University of Michigan is to release preliminary data on inflation expectations and consumer sentiment, a leading indicator of consumer spending.