Investing.com - The U.S. dollar jumped to an 11-month high against the broadly weaker yen on Friday, after stronger-than-forecast U.S. employment data dampened expectations for a fresh round of monetary easing by the Federal Reserve.
USD/JPY hit 82.63 on Friday, the pair’s highest since April 27, 2011; the pair subsequently consolidated at 82.44 by close of trade, advancing 0.83% over the week.
The pair is likely to find support at 81.45, Friday’s low and resistance at 83.25, the high of April 18, 2011.
The dollar rallied more than 1% against the yen on Friday, after the Department of Labor said the U.S. economy added 227,000 jobs in February after increasing by a revised 284,000 the previous month. The unemployment rate held steady at a three year low of 8.3%.
The strong data boosted the dollar as it diminished expectations for a fresh round of asset purchases by the Federal Reserve to help stimulate economic growth.
Meanwhile, in the euro zone, Greece announced that more than 85% of its private creditors had signed up to a debt swap deal, aimed at restructuring 53.5% of the country’s debt. The deal cleared the way for Athens to secure a second bailout worth EUR130 billion and avert a default.
But market sentiment was tempered after the International Swaps and Derivatives Association said the debt swap constituted a “credit event” that would activate credit-default swaps, which designed to protect investors against losses on Greek sovereign debt.
The yen had come under pressure after data on Thursday showed that Japan’s current account balance swung to a record deficit of JPY437.3 billion in January, prompting Bank of Japan Governor Masaaki Shirakawa to reiterate that the bank was prepared to loosen monetary policy again if needed to support the economy.
A separate report confirmed that Japan’s gross domestic product contracted by 0.2% in the last three months of 2011, in line with earlier estimates.
The yen was almost unchanged against the euro on Friday, with EUR/JPY closing down 0.02% at 108.22.
In the week ahead, investors will be continuing to watch developments in Greece, while both the BoJ and the Federal Reserve are to hold monetary policy meetings. Investors will also be watching Tuesday’s U.S. data on retail sales in order to gauge the strength of consumer spending.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 12
Japan is to produce government data on core machinery orders, a leading indicator of production. The country is also to publish official data on the corporate goods price index and household confidence.
Later in the day, the U.S. is to publish government data on the federal budget balance.
Tuesday, March 13
The BoJ is to announce its benchmark interest rate following its monetary policy meeting. The central bank will also hold a post-policy meeting press conference to discuss monetary policy. In addition, Japan is to release government data on tertiary industry activity, a key indicator of economic health.
The U.S. is to release government data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to produce official data on business inventories, a signal of future business spending.
Also Tuesday, the Federal Reserve is to announce its benchmark interest rate; the announcement will be accompanied by the central bank’s rate statement.
Wednesday, March 14
Japan is to release government data on manufacturing activity, a leading indicator of economic health, followed by the BoJ’s monthly report.
Later in the day, the U.S. is to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles. In addition, Federal Reserve Chairman Ben Bernanke is also due to speak; his comments will be closely watched for clues to the future possible direction of monetary policy.
Thursday, March 15
The U.S. is to release government data on producer price inflation, a leading indicator of consumer inflation, as well as official data on unemployment claims. The country is also to produce reports on manufacturing activity in New York and Philadelphia, as well as a government report on net long-term securities transactions.
Friday, March 16
The BoJ is to release the minutes of its policy-setting meeting from earlier in the week.
The U.S. is to round up the week with government data on consumer price inflation, followed by reports from the Federal Reserve on the capacity utilization rate and industrial production. In addition, the country is also to release preliminary reports by the University of Michigan on consumer sentiment and inflation expectations.
USD/JPY hit 82.63 on Friday, the pair’s highest since April 27, 2011; the pair subsequently consolidated at 82.44 by close of trade, advancing 0.83% over the week.
The pair is likely to find support at 81.45, Friday’s low and resistance at 83.25, the high of April 18, 2011.
The dollar rallied more than 1% against the yen on Friday, after the Department of Labor said the U.S. economy added 227,000 jobs in February after increasing by a revised 284,000 the previous month. The unemployment rate held steady at a three year low of 8.3%.
The strong data boosted the dollar as it diminished expectations for a fresh round of asset purchases by the Federal Reserve to help stimulate economic growth.
Meanwhile, in the euro zone, Greece announced that more than 85% of its private creditors had signed up to a debt swap deal, aimed at restructuring 53.5% of the country’s debt. The deal cleared the way for Athens to secure a second bailout worth EUR130 billion and avert a default.
But market sentiment was tempered after the International Swaps and Derivatives Association said the debt swap constituted a “credit event” that would activate credit-default swaps, which designed to protect investors against losses on Greek sovereign debt.
The yen had come under pressure after data on Thursday showed that Japan’s current account balance swung to a record deficit of JPY437.3 billion in January, prompting Bank of Japan Governor Masaaki Shirakawa to reiterate that the bank was prepared to loosen monetary policy again if needed to support the economy.
A separate report confirmed that Japan’s gross domestic product contracted by 0.2% in the last three months of 2011, in line with earlier estimates.
The yen was almost unchanged against the euro on Friday, with EUR/JPY closing down 0.02% at 108.22.
In the week ahead, investors will be continuing to watch developments in Greece, while both the BoJ and the Federal Reserve are to hold monetary policy meetings. Investors will also be watching Tuesday’s U.S. data on retail sales in order to gauge the strength of consumer spending.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 12
Japan is to produce government data on core machinery orders, a leading indicator of production. The country is also to publish official data on the corporate goods price index and household confidence.
Later in the day, the U.S. is to publish government data on the federal budget balance.
Tuesday, March 13
The BoJ is to announce its benchmark interest rate following its monetary policy meeting. The central bank will also hold a post-policy meeting press conference to discuss monetary policy. In addition, Japan is to release government data on tertiary industry activity, a key indicator of economic health.
The U.S. is to release government data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to produce official data on business inventories, a signal of future business spending.
Also Tuesday, the Federal Reserve is to announce its benchmark interest rate; the announcement will be accompanied by the central bank’s rate statement.
Wednesday, March 14
Japan is to release government data on manufacturing activity, a leading indicator of economic health, followed by the BoJ’s monthly report.
Later in the day, the U.S. is to produce official data on the country’s current account, as well as data on import prices and crude oil stockpiles. In addition, Federal Reserve Chairman Ben Bernanke is also due to speak; his comments will be closely watched for clues to the future possible direction of monetary policy.
Thursday, March 15
The U.S. is to release government data on producer price inflation, a leading indicator of consumer inflation, as well as official data on unemployment claims. The country is also to produce reports on manufacturing activity in New York and Philadelphia, as well as a government report on net long-term securities transactions.
Friday, March 16
The BoJ is to release the minutes of its policy-setting meeting from earlier in the week.
The U.S. is to round up the week with government data on consumer price inflation, followed by reports from the Federal Reserve on the capacity utilization rate and industrial production. In addition, the country is also to release preliminary reports by the University of Michigan on consumer sentiment and inflation expectations.