© Dukascopy Bank SA
The USD/JPY currency cross was moving mostly to the north during the previous trading week, despite long-term bearish trend, mostly reflecting strength of the Yen, rather than weakness of the Dollar. The greenback increased against the Japanese yen in the middle of the observed period, despite rather weak initial jobless claims that reached the five-week high. Therefore, the buck was heading for a four-day winning streak amid its attempt to bounce from the eighteen-month low. At the end of the period, the Dollar again posted some looses which have arisen due to the crucial nonfarm payrolls release in April. Overall the strong power of the Yen could be explained due to the Bank of Japan decision to keep the monetary policy unchanged despite previous comments of the excessive yen's appreciation. In addition, the unexpected drop of nonfarm payrolls also supported dollar with the record low unemployment rate, staying unchanged at 5%, marching almost a decade low in April.
Compared to the previous week the bullish sentiment gained even more strength, as two thirds of all votes are now set to acquire the American currency versus the Yen. As a result, the average forecast for the pair for the end of this week went up to 107. As usually, the vast part of economic news will come from the United States, including initial jobless claims. However, from the Japanese side the BoJ is to publish the minutes of its April policy meeting, giving investors insight into how officials view the economy and their policy options.
© Dukascopy Bank SA