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Forex - USD/JPY jumps up on upbeat U.S. June jobs report

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Investing.com - The dollar shot up by more than 1% against the yen on Friday after official data revealed far more hiring took place in the U.S. in June than expected, which sparked speculation the Federal Reserve remains on track to begin tapering stimulus measures later this year.

In U.S. trading on Friday, USD/JPY was trading at 101.11, up 1.07%, up from a session low of 99.90 and off a high of 101.13.

The pair was likely to find resistance at 102.53, the high from May 29, and support at 99.90, the earlier low.

The Bureau of Labor Statistics reported earlier the U.S. economy added 195,000 nonfarm payrolls in June, well above analysts' calls for a 165,000 increase.

May's figure was revised upwards to 195,000 jobs from 175,000, while April's figure was revised upwards to 199,000 from 149,000.

The headline unemployment rate remained unchanged at 7.6% last month, while hourly earnings rose 0.4% compared to market calls for a 0.2% gain.

The numbers sent the dollar gaining by fueling sentiments monetary stimulus measures are on their way out by next year.

Today, the Federal Reserve is buying USD85 billion in Treasuries and mortgage securities each month to push down borrowing cross across the economy and drive recovery, a monetary policy tool known as quantitative easing that weakens the greenback and makes assets like stocks and gold attractive.

Past rounds of quantitative easing saw the Fed snap up USD1.7 trillion in mortgage assets from banks just after the 2008 financial crisis followed by a second round in 2011, in which the Fed bought USD600 billion in Treasury holdings and mortgage debt from banks.

The current and open-ended round, known widely as QE3, is expected to begin winding down later this year and end in 2014 if the economy continues to improve.

The yen, meanwhile, was up against the pound and down against the euro, with GBP/JPY down 0.02% and trading at 150.77 and EUR/JPY trading up 0.43% at 129.73.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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