Forex - Yen gain slightly on jobs data, but CPI data misses expectations

Investing.com - The Japanese yen picked up some strength on Friday after mixed data showed a drop in unemployment, but weaker than expected CPI and industrial output.

USD/JPY traded at 118.2, down 0.03%, while AUD/USD changed hands at 0.7774, up 0.19%. EUR/USD rose 0.04% to 1.1324.

In Japan, December core CPI rose 2.5%, below an expected 2.6% gain, while the jobles rate dipped to 3.4%, better than the 3.5% expected with the job seeker ratio at 1.15, the highest since 1992 and compared to an expectation of 1.12, and household spending declined 3.4%, missing an expected 2.5% drop year-on-year.

As well, Japan December industrial output data rose 1.0%, below the 1.3% gain expected month-on-month.

Further ahead at 1400 (0500 GMT) is the release of December housing starts, expected to fall further for a 10th straight year-on-year decline after a 14.3% drop in November.

In Australia, fourth quarter PPI and the RBA's private sector credit data are due at 1130 Sydney time (0030 GMT). Expectations for PPI show a 0.3% rise quarter-on-quarter and 0.5% month-on-month for private sector credit.

Overnight, the U.S. dollar hit fresh highs against its Canadian counterpart on Thursday, trading at a nearly six-year peak as data showing that U.S. jobless claims fell to the lowest level since 2000 last week coupled with the Federal Reserve's latest policy statement supported the greenback.

In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending January 24 decreased by 43,000 to 265,000 from the previous week’s total of 308,000.

Analysts had expected initial jobless claims to decline by 8,000 to 300,000 last week.

The greenback also remained supported after the Fed signaled that interest rates could start to rise around mid-year.

Following its policy meeting on Wednesday, the Fed said it would keep rates on hold at least until June and reiterated its pledge to be patient on raising interest rates, while acknowledging the solid economic recovery and strong growth in the labor market.

The central bank also said it expected inflation to keep declining in the short term and added that it would take "financial and international developments" into account before deciding when to hike borrowing costs.

In the euro zone, Germany's Federal Statistics Office said the number of unemployed people declined for the fourth consecutive month in January, falling by 9,000, compared to expectations for a drop of 10,000.

The report showed that Germany’s unemployment rate hit a record-low 6.5% in January, down from 6.6% in December, in line with expectations.

The US Dollar Index, which measures the greenback against a basket of six currencies, stood at 94.95, down 0.01%.