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Direction for USD/JPY clearer after US NFP release - BTMU

FXStreet (Łódź) - Derek Halpenny, European Head of Currency Strategy at the Bank of Tokyo Mitsubishi UFJ, sees US NFP rebounding in September and providing support for USD/JPY.

Key Quotes

"Of course the direction for USD/JPY now will be more determined by the details of this afternoon’s non-farm payrolls report. After the steady 213k gain reported in the ADP employment report on Wednesday, we see upside risks for today’s payrolls report, suggesting USD/JPY support."

"The 142k gain last month looks an aberration. With the FOMC now looking at “a range” of labour market indicators we also need to look at many other components within the report like the participation rate, the U6 unemployment rate and average earnings. Given the claims data and strong hiring plans in the Challenger data yesterday, we see little reason not to expect another robust jobs report today."

"One point worth noting though is the announcement this week from the Fed Board of Governors that it would from Monday start to release on a monthly basis its own Labour Market Conditions Indicator (LMCI) which incorporates 19 different labour market indicators. It was mentioned by Chair Yellen at Jackson Hole as a useful way to gauge a broader picture of labour market conditions."

"No doubt this data on Monday will now be watched closely by the market and hence may marginally dilute reaction in the markets to the NFP data today. We covered this in more detail in the BTMU FX Weekly yesterday."

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