Forexpros – The U.S. dollar ended the week down against the yen on Friday, trading within striking distance of the pair’s all-time low, after data showing that the U.S. added no new jobs last month added to expectations for further monetary stimulus by the Federal Reserve.
USD/JPY hit 76.52 on Friday, a two-day low; the pair subsequently consolidated at 76.79 by close of trade on Friday, easing down 0.07% over the week.
The pair is likely to find short-term support at 76.29, the low of August 11 and resistance at 77.23, Thursday’s high and a four-day high.
On Friday, the Department of Labor said U.S. non-farm payrolls were unchanged last month, the weakest reading since September 2010, after rising by a downwardly revised 85,000 in July. Economists had expected non-farm payrolls to rise by 74,000 in August. The jobless rate remained unchanged at 9.1%.
The dismal data fuelled speculation that the Fed will embark on a third round of monetary easing after Chairman Ben Bernanke said last week that the central bank remained prepared to implement measures to stimulate the U.S. growth.
The central bank’s September policy-setting meeting has been extended from one day to two, in order to give policymakers time to consider all the options.
Also Friday, Japan’s new Prime Minister Yoshihiko Noda named his cabinet, selecting Jun Azumi, who is relatively unknown in financial markets, as finance minister.
In his first press conference, Mr. Azumi said he was concerned over the persistent strength of the yen and added that he would closely watch its moves, echoing the stance of Mr. Noda, his predecessor.
Last month, Noda unveiled a two-pronged approach aimed at curbing the appreciation of the yen, creating a credit line to promote foreign investment and imposing new rules on companies’ foreign exchange holdings.
In the week ahead, investors will be looking to a speech by U.S. President Barack Obama to Congress on Thursday, for indications on how he plans to boost job creation. Meanwhile, Japan is to publish official data on gross domestic product.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, September 5
Markets in the U.S. are to remain closed for the Labor Day holiday, which marks the traditional end of summer.
Tuesday, September 6
In the U.S., the Institute of Supply Management is to produce a report on service sector activity, a leading indicator of economic health.
Wednesday, September, 7
The Bank of Japan is to announce its benchmark interest rate. The announcement will be followed up by a closely watched press conference, which will outline the factors surrounding the rate decision and discuss the economic outlook.
Also Wednesday, Federal Reserve Bank of Chicago President Charles Evans is to speak. His comments will be closely watched for clues to the future direction of monetary policy. The Fed is also to publish its beige book, which looks at regional economic conditions.
Thursday, September 8
Japan is to publish official data on machinery orders, a leading indicator of manufacturing production.
The U.S. is to publish its weekly report on initial jobless claims, as well as official data on the trade balance and crude oil stockpiles.
Also Thursday, U.S. President Barack Obama is to make a speech to Congress, outlining how he intends to stimulate employment creation and lower unemployment, as part of his jobs plan.
Friday, September 9
Japan is to round up the week with revised data on second quarter GDP, an all-inclusive measure of economic activity and the most important indicator of economic growth.
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