- The Japanese Yen (JPY) fell on Friday
- BoJ left rates unchanged at 0.25%
- The US Dollar (USD) rose on Friday
- US NFP saw 12k jobs added
The US Dollar Japanese Yen (USD/JPY) exchange rate rose on Friday, recovering from losses on Thursday. The pair fell 0.9% in the previous week, settling on Friday at 152.03. USD/JPY ended 0.6% higher on Friday at 152.98 and is in a range of 153.09 to 151.77. The pair rose 0.45% across the week, its fifth straight weekly rise.
The yen fell on Friday after the Bank of Japan left interest rates unchanged at 0.25%, in line with expectations, while sticking to its view that it remains on track to reach its inflation target. This suggests that another rate hike could still be on the cards for the coming months.
Governor Ueda reinforced this view at the press conference following the decision, saying the current political situation in Japan wouldn’t stop him from hiking rates if the data pointed to that.
The US Dollar is rising across the board on Friday. The US Dollar Index, which measures the greenback against a basket of major currencies, rose to 104.28 at the time of writing, up 0.3%, after two days of losses.
The US dollar rose on Friday despite much weaker than expected US nonfarm payroll. The non-farm payroll showed that just 12,000 jobs were created in the US in October, well below the 113,000 that were expected. I’m well below the 200 and 54,000 from the previous week month. This was down to weakness from significant strike action across the month and measurement hit due to hurricane-related disruptions.
Meanwhile the unemployment rate remained unchanged at 4.1% while wages rose 0.4% month on month.
The data showed that the Federal Reserve has headroom to continue cutting interest rates. The bank will meet next week and is expected to cut rates by 25 basis points.
The US election on November 5th is also likely to be a key driver of The US dollar next week.