USD/JPY gains on U.S. jobs report, soft Chinese trade figures


Shutterstock photo - - The dollar rose against the yen on Monday as investors continued to applaud Friday's better-than-expected February jobs report in the U.S., while slumping Chinese trade figures sparked safe-haven demand for the greenback.

In U.S. trading, USD/JPY was up 0.03% and trading at 103.29, up from a session low of 102.94 and off a high of 103.41.

The pair was expected to test support at 101.20, the low from March 3, and resistance at 103.76, Friday's high.

The Bureau of Labor Statistics reported Friday that the U.S. economy added 175,000 jobs in February, beating expectations for a 149,000 increase.

January's figure was revised up to 129,000 from 113,000.

The data extended the dollar's gains into Monday, as the Federal Reserve has said it will pay close attention to data when deciding on how quickly it will dismantle its monthly bond-buying program.

Fed bond purchases, currently set at $65 billion a month, weaken the dollar by suppressing interest rates to spur recovery by encouraging investing and hiring.

Weak Chinese trade data supported the greenback as well by bolstering its appeal as a safe-haven asset class.

Data released over the weekend showed that Chinese exports fell 18.1% on-year in February, defying expectations for a 6.8% increase, following a rise of 10.6% in January.

A separate report showed that the annual rate of inflation in China slowed to 2.0% in February, from 2.5% in January.

The numbers confirmed market concerns that emerging markets are cooling.

Meanwhile in Japan, data revealed the economy grew 0.2% in the final three months of 2013, missing market calls for a 0.3% reading.

On a year-over-year basis, the economy expanded by 0.7%, missing expectations for a 1.0% reading.

The yen, meanwhile, was down against the euro and up against the pound, with EUR/JPY up 0.02% at 143.32, and GBP/JPY trading down 0.46% at 171.81.

The euro saw some support on market views that the European Central Bank will hold off on stimulating the economy further.

Last week, the ECB left its benchmark interest rate unchanged at 0.5%, as recent data indicated moderate economic recovery was taking place in the euro zone.

Elsewhere in Europe, investor confidence in the euro zone for March rose to its highest level since April 2011, easing concerns over the outlook for the region's economy, data showed on Monday.

Market research group Sentix reported earlier that its index of investor confidence improved to 13.9 this month from a reading of 13.3 in February. Analysts were expecting the index to increase to 14.0 in March.

On the index, a level above 0.0 indicates optimism, below indicates pessimism.

Separately, French industrial output fell unexpectedly in January, official data showed on Monday.

In a report, INSEE said that French Industrial Production fell to -0.2% in January from -0.6% in the preceding month.

Analysts had expected French Industrial Production to rise 0.2% last month.

On Tuesday, the Bank of Japan is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank's decision. The announcement is to be followed by a press conference. offers an extensive set of professional tools for the financial markets.
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This article appears in: Investing , Forex and Currencies

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