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5 Jun 2014
JPY supported on US jobs data - BTMU
FXStreet (London) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that the Japanese yen has been supported by the release of weaker than expected ADP employment numbers
Key Quotes
"The yen has strengthened modestly in the Asian trading session ahead of today’s key ECB monetary policy meeting which will likely prove important in determining whether global investor risk sentiment continues to improve in the near-term. The yen has been supported by the release of the weaker than expected ADP employment survey which estimated that the US economy likely only added 179k private sector jobs in May signaling that employment growth has likely moderated in the near-term."
"The late timing of Easter may have boosted employment growth in April which may be followed by some payback weakness in May. However, it is also true that the ADP survey has tended to underestimate actual non-farm private employment growth by an average of around 25k jobs/month over the last three months."
"Overall, we continue to believe that the underlying trend for employment growth in the US remains strong with non-farm private employment gains having averaged 200k jobs/month over the last six months. The release of the US trade report for April was also disappointing as the trade deficit widened for the fifth consecutive month reaching its widest level since April 2012 indicating that net trade is likely to remain a drag on growth in Q2."
"On a more positive note, the release of the ISM non-manufacturing survey revealed that business confidence improved for the third consecutive month reaching its highest level since August 2013. The improvement in the new orders sub-component was even more impressive rising to its highest level since January 2011 providing a further signal that the US economy is likely rebounding strongly after the sharp slowdown in Q1."
Key Quotes
"The yen has strengthened modestly in the Asian trading session ahead of today’s key ECB monetary policy meeting which will likely prove important in determining whether global investor risk sentiment continues to improve in the near-term. The yen has been supported by the release of the weaker than expected ADP employment survey which estimated that the US economy likely only added 179k private sector jobs in May signaling that employment growth has likely moderated in the near-term."
"The late timing of Easter may have boosted employment growth in April which may be followed by some payback weakness in May. However, it is also true that the ADP survey has tended to underestimate actual non-farm private employment growth by an average of around 25k jobs/month over the last three months."
"Overall, we continue to believe that the underlying trend for employment growth in the US remains strong with non-farm private employment gains having averaged 200k jobs/month over the last six months. The release of the US trade report for April was also disappointing as the trade deficit widened for the fifth consecutive month reaching its widest level since April 2012 indicating that net trade is likely to remain a drag on growth in Q2."
"On a more positive note, the release of the ISM non-manufacturing survey revealed that business confidence improved for the third consecutive month reaching its highest level since August 2013. The improvement in the new orders sub-component was even more impressive rising to its highest level since January 2011 providing a further signal that the US economy is likely rebounding strongly after the sharp slowdown in Q1."