Forexpros – The dollar was lifted against the yen on Friday, after data showing the U.S. economy added more jobs than forecast last month dampened speculation that the Federal Reserve may embark on a fresh round of easing measures to boost growth.
USD/JPY hit 76.02 on Wednesday, the pair’s lowest since October 31; the pair subsequently consolidated at 76.59 by close of trade on Friday, inching up 0.09% over the week.
The pair was likely to find support at 76.02, Wednesday’s low and a three-month low and resistance at 76.77, Monday’s high.
The U.S. Department of Labor said nonfarm payrolls rose by 243,000 last month, the fastest increase in nine months, after a revised 203,000 gain in December. Economists had expected the U.S. economy to add 150,000 jobs in January. The unemployment rate unexpectedly declined to a three-year low of 8.3%.
A separate report showing a greater-than-expected expansion in the U.S. service sector in January also boosted the greenback.
The greenback had weakened against the yen since last month’s Federal Reserve policy meeting, after the central bank pushed back the timing of a likely interest rate hike until mid-2014 indicated that the bank may embark on a third round of quantitative easing to bolster growth.
The dollar’s steady decline to within striking distance of the pair’s post-war low prompted Japanese authorities to warn that they would take “decisive measures” to curb the appreciation of the yen.
In testimony to the House Budget Committee in Washington on Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.
Demand for the safe haven yen found support as investors remained jittery amid uncertainty over delays in negotiations on a debt restructuring deal for Greece.
Greece needs to secure an agreement with its private creditors on a debt swap deal in order to receive its next tranche of bailout funds in order to avoid a default when a EUR14.5 billion bond repayment comes due on March 20.
In the week ahead, investors will be watching developments in the euro zone, with European leaders holding a string of meetings to discuss Greece’s bailout and the financial guarantees for the European Financial Stability Facility, the euro zone’s new bailout fund.
In the U.S., Fed Chairman Ben Bernanke is to testify before the Senate budget committee in Washington.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday as there are no relevant events on this day.
Tuesday, February 7
In the U.S., Fed Chairman Ben Bernanke is due to testify on the economic outlook and federal budget situation before the Senate Budget Committee in Washington.
Japan is to publish an index of leading economic indicators, designed to forecast the future direction of the economy.
Wednesday, February 10
Japan is to publish government reports on bank lending and the current account.
Later in the day, the U.S. is to produce official data on crude oil stockpiles.
Thursday, February 9
Japan is to release government data on core machinery orders, a key gauge of production.
Later in the day, the U.S. is to publish government data on unemployment claims, an important signal of overall economic health.
Friday, February 10
The U.S. is to round up the week with official data on the country’s trade balance, the difference in value between imports and exports, as well as preliminary data from the University of Michigan on consumer sentiment and inflation expectations.
Later in the day, Fed Chair Ben Bernanke is due to speak about the housing market at the 2012 National Association of Homebuilders International Builders show.
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