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USD/JPY drops as weekly jobless data reveal labor-market softness

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Shutterstock photo - - The dollar fell against the yen on Thursday after data on weekly U.S. jobless claims revealed the U.S. labor market may still be battling headwinds along its road to recovery.

The Federal Reserve has said it will pay close attention to jobs reports when deciding on the fate of its USD75 billion monthly bond-buying program.

In U.S. trading, USD/JPY was down 0.95% and trading at 103.53, up from a session low of 103.37 and off a high of 104.84.

The pair was expected to test support at 102.86, the low from Jan. 13, and resistance at 104.92, the high from Jan. 16.

In the U.S. earlier, the Labor Department reported that weekly initial jobless claims rose in line with expectations last week, but the number of continuing jobless claims remained above the 3 million mark for a second successive week.

The number of individuals filing for unemployment assistance in the U.S. last week rose to 326,000, up from the previous week's revised total of 325,000 and in line with analysts' forecasts.

The number of people filing continuing unemployment claims rose to 3.056 million up from 3.022 million in the week to Jan. 11.

Analysts had expected continuing claims to fall to 2.930 million, and the numbers reminded investors that the Federal Reserve will take its time dismantling its USD75 billion bond-buying program.

Fed bond purchases tend to soften the dollar as long as they remain in effect by suppressing long-term interest rates to spur recovery, sending investors to asset classes like stocks and commodities in the process.

Elsewhere, U.K.-based Markit Economics reported that U.S. factory output fell to a three-month low in January, mainly due to the impacts that wintry weather had on commerce.

The U.S. manufacturing PMI declined to 53.7 this month from a final reading of 55.0 in December. Analysts had expected the index to hold steady.

Also Thursday, the National Association of Realtors reported that U.S. existing home sales came in at 4.87 million units last month from 4.82 million in November, missing expectations for an increase to 4.94 million.

The yen, meanwhile, was up against the euro and up against the pound, with EUR/JPY trading down 0.06% at 141.52, and GBP/JPY trading down 0.73% at 171.96. offers an extensive set of professional tools for the financial markets.

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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.

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