Forex - USD/JPY gains ahead of release of September jobs report

A A A - " The dollar firmed against the yen on Monday as investors remained camped out in the safety of the liquid greenback ahead of the release of the U.S. September unemployment report due out Tuesday.

In U.S. trading on Friday, USD/JPY was trading at 98.15, up 0.37%, up from a session low of 97.79 and off a high of 98.25.

The pair was likely to find support at 96.56, Friday's low, and resistance at 99.00, Thursday's high.

A U.S. government shutdown that began Oct. 1 and ended last week left the dollar without one of its chief steering currents, the monthly U.S. jobs report.

September's unemployment data will hopefully give investors a weather vane over the direction of U.S. monetary policy.

The Fed is currently buying USD85 billion in Treasury holdings and mortgage debt a month to boost the economy, a monetary policy tool known as quantitative easing that drives down interest rates to spur recovery, weakening the dollar in the process.

The government shutdown and accompanying default fears along with the naming of dovish Janet Yellen as the new Chair of the Federal Reserve left may investors guessing when the U.S. central bank will announce plans to taper its quantitative easing program, which could push the dollar up in the long term.

Investors hope the September jobs data, originally due out Oct. 4, will provide a fresh weather vane for the dollar.

Elsewhere, lackluster data out of the U.S. housing sector softened the dollar's advance over the yen, which served as a safe-haven currency during Washington's fiscal showdown.

The National Association of Realtors reported earlier that total existing home sales declined 1.9% to a seasonally adjusted annual rate of 5.29 million units in September from a downwardly revised 5.39 million in August, mainly due to home prices outpacing income growth.
Analysts were expecting to see 5.30 million units sold.

Meanwhile in Japan, the yen came under pressure after Bank of Japan Governor Haruhiko Kuroda reiterated Monday that the bank would stick to its stimulus program and added that the economy was on track to reach the bank's 2% inflation target.

The yen was down against the pound and down against the euro, with GBP/JPY up 0.26% and trading at 158.50 and EUR/JPY trading up 0.35% at 134.28.

On Tuesday, expect the pair to trade on the U.S. jobs report.
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This article appears in: Investing , Forex and Currencies

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