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Forex - USD/JPY weekly outlook: March 10 - 14

Published 03/09/2014, 06:44 AM
Updated 03/09/2014, 06:44 AM - The dollar rose to its highest level against the yen in six-weeks on Friday after the U.S. employment report for February came in ahead of expectations.

USD/JPY rose to 103.75, the highest since January 23 before settling at 103.24, 0.18% higher for the day. For the week, the pair gained 1.81%.

The pair is likely to find support at 102.83, Friday’s low and resistance at 104.10.

The U.S. economy added 175,000 jobs in February, the Labor Department reported, well above expectations for 149,000 new jobs. The unemployment rate ticked up to 6.7% from 6.6% in January, as more people joined the workforce.

The jobs report eased concerns over soft U.S. employment and other economic data seen in the past few months. The strong figure indicated that the Federal Reserve is likely to continue to scale back its stimulus program, which has weighed on the value of the dollar.

The euro rose to two-month highs against the yen on Friday, with EUR/JPY hitting highs of 143.79, before settling at 143.29, up 0.30%.

The euro added to the previous session’s strong gains after a report from the European Central Bank showed that banks in the euro area are set to repay a large portion of its emergency three-year loans next week.

The common currency strengthened across the board on Thursday as expectations for further monetary easing by the ECB dimmed after the bank refrained from tightening policy, saying economic conditions did not support such a move.

ECB President Mario Draghi said the latest economic data indicated that the economic recovery in the euro zone is proceeding, and added that the bank was ready to take further action if needed.

In the week ahead, U.S. data on retail sales and consumer sentiment will be in focus. Investors will able be looking ahead to Wednesdays monetary policy announcement by the Bank of Japan.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets.

Monday, March 10

Japan is to release data on the current account, as well as revised data on fourth quarter economic growth.

Tuesday, March 11

The BoJ is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision. The announcement is to be followed by a press conference.

Wednesday, March 12

Japan is to publish its BSI manufacturing index and a report on tertiary industry activity.

Thursday, March 13

Japan is to publish data on core machinery orders.

The U.S. is to release data on retail sales and import prices, in addition to the weekly government report on initial jobless claims.

Friday, March 14

The BoJ is to publish monetary policy meeting minutes, which contain valuable insights into economic conditions from the bank’s point of view.

The U.S. is to round up the week with data on producer price inflation and preliminary data from the University of Michigan on consumer sentiment.

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