Fewer jobs were created than expected in the United States last month, official data revealed on Friday. According to the Labor Department, total nonfarm payroll employment in the country jumped 151,000 in August, following July's upwardly revised gain of 275,000, whereas market analysts expected the economy to add 180,000 new jobs in the reported month. Over the past three months, job gains averaged 232,000, compared with 182,000 for the first eight months of 2016. Furthermore, average hourly earnings advanced 0.1%, down from July's 0.3%, while the average workweek dropped to 34.3 hours in the same month from July's 34.4, leading to a 0.2% decline in the index of aggregate weekly hours. Over the past month, job growth in construction and manufacturing was weak, while strong in retail, healthcare, leisure, and government sectors.
The headline unemployment rate remained unchanged at 4.9%, whereas economic desks anticipated a slight deceleration to 4.8% during the reported period. Average hourly earnings held steady at 2.4% in the same month. On Wednesday, payroll processor ADP said US companies created 177,000 new jobs in August, slightly surpassing the 174,000 market forecast. The report put into question the possibility of an interest rate increase by the Federal Reserve at its September meeting.
Activity to stay decreased until Tuesday
Today there are hardly any reasons for USD/JPY to move after Haruhiko Kuroda failed to reinforce easing expectations. US banks will be closed due to Labour Day, and there are no important releases scheduled in Japan until the end of the day. There will be more reasons for volatility to rise tomorrow, when US Services PMI are expected to show expansion of the sector at nearly the same pace as month ago - 55.4 after 55.5 for July.USD/JPY ready to rebound from 103 yen
The current setup is bullish for USD/JPY, as the currency pair has broken out of the descending channel that had been guiding the price lower since the end of 2015. However, we would like to wait for a confirmation of support at 103 yen before claiming that Dollar is going to appreciate, as fundamentals have not been supportive of USD/JPY rally lately. Once 103 is established as a solid demand area, our target will be the 100-day SMA at 105.30, followed by the July high at 107.50. Alternatively, the rate will likely slide down to 100 yen.Daily chart
Traders have become somewhat less bullish the US Dollar, but long positions still dominate the market with a 64% share. In the meantime, advantage of sell orders over the buy ones was reduced from 14 percentage points to naught.
Sentiment is bullish elsewhere, but to a lesser extent. For example, 58% (63% last Friday) of positions open at OANDA are long, and 57% (66% last Friday) of positions open at Saxo Bank are long as well.
Spreads (avg, pip) / Trading volume / Volatility
More than a half expect the exchange rate to fall below 105.00 yen