Forex Pros – Last week saw the U.S. dollar slump to a five-week low against the yen on Friday, as the release of weaker-than-expected employment data coming after a string of negative U.S. economic data added to concerns over a slowdown in U.S. growth.

USD/JPY hit 80.05 on Friday, the pair’s lowest since May 5; the pair subsequently consolidated at 80.27 by close of trade, tumbling 0.74% over the week.

The pair is likely to find short-term support at 79.56, the low of May 5 and resistance at 81.50, last Wednesday’s high.

On Friday, the U.S. Department of Labor said nonfarm payrolls rose much less-than-expected in May, increasing by just 54K as the private sector posted the smallest jobs gain in nearly a year. Analysts had expected nonfarm payrolls to rise by 169K last month. The unemployment rate unexpectedly rose to 9.1% from 9.0% in April.

The report came after U.S. data earlier in the week showed that manufacturing activity slumped to a one-year low in May, while consumer confidence dropped to a six-month low.

Moody’s Investors Service said Thursday it may place the U.S. government’s rating under review for possible downgrade based on progress by Congress and the Obama administration on increasing the statutory debt limit in coming weeks.

On Tuesday, the dollar surged to a four-day high against the yen after Moody’s said it was placing Japan’s sovereign debt rating under review for a possible downgrade, as the government continues to struggle in the face of political deadlock over fiscal consolidation and how to finance reconstruction efforts from the March 11 disaster.

The announcement came less than a week after ratings agency Fitch cut its outlook on Japan’s debt.

Meanwhile, on Thursday, Japan’s Prime Minister Naoto Kan survived a vote of no-confidence after he offered to resign once the country’s worst crisis since WWII is under control.

Discord in the ruling party has hampered Kan’s efforts to deal with a stagnant economy and heightened concerns over the government’s ability to reign in the nation’s debt burden.

In the week ahead, Japan is to publish revised data on first quarter economic growth, while Federal Reserve Chairman Ben Bernanke is to speak.

Ahead of the coming week, Forex Pros 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, June 7

The U.S. is to publish official data on consumer credit, which is correlated with consumer confidence and spending. Also Tuesday, Federal Reserve Chairman Ben Bernanke is to speak; his comments will be closely watched for any clues to the future possible direction of monetary policy.

Wednesday, June 8

Japan is to publish official data on bank lending, the nation’s current account and M2 money supply as well as an index of current economic conditions.

Later in the day, the U.S. is to publish official data on crude oil inventories while the Federal Reserve is to publish its Beige Book, which gives insights into the data policymakers looked at when making their interest rate decision.

Thursday, June 9

Japan is to publish revised data on first quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy’s health, as well as a report on household confidence and preliminary data on machine tool orders.

Also Thursday, the U.S. is to publish official data on the trade balance, the difference in value between imported and exported goods, as well as its weekly report on initial jobless claims.

Friday, June 10

Japan is to publish an index of tertiary industry activity, a leading indicator of economic health.

The U.S. is to round up the week with official data on import prices, which contribute to overall inflation, while the Federal Reserve is to publish a report on the federal budget balance.

ForexPros.com