The yen’s two-month rally from its October low is coming under threat after the currency slipped below a key support level, opening the door for it to start weakening again.
(Bloomberg) — The yen’s two-month rally from its October low is coming under threat after the currency slipped below a key support level, opening the door for it to start weakening again.
The currency fell for a fourth day Friday following stronger-than-forecast US ADP employment data, dropping further below a support line starting from October’s three-decade low. It fell as much as 0.9% to 134.59 per dollar, its weakest since Dec. 20.
November’s 3.8% decline in real earnings from a year earlier, the most since May 2014, also weighed on the yen. It extended losses after a Bloomberg report that Bank of Japan officials see little need to rush to make another adjustment to its yield-curve control policy.
Yen bears are now awaiting Friday’s US payrolls numbers, which may confirm a tight labor market is adding to inflationary pressures, backing the Federal Reserve’s pledge that it still has a “ways to go” in raising interest rates.
Stronger-than-expected US employment data may see dollar-yen risk testing its 200-day moving average of 136.48, said Patrick Bennett, a strategist at Canadian Imperial Bank of Commerce in Hong Kong.
–With assistance from Alice Gledhill.
(Updates pricing, adds real wage decline in third paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.
