USD/JPY: forecast for March 7-13
By Elizabeth Brelugina
US labor market data turned out to be mixed. Despite strong Nonfarm Payrolls, average hourly earnings declined. As a result, the level of 115.00 (38.2% of February decline) still looks like a hard obstacle. Only a daily fix above this point will return power to the bulls. On the downside, support lies at 113.00, 112.20 ahead of 111.00.
In the meantime, the market is starting to expect more action from the Bank of Japan and this is why the pair is trying to stabilize. There’s information that an advocate of aggressive monetary easing may join the central bank’s board at the end of March. The next Bank of Japan’s meeting will be on March 15.
The Bank of Japan’s Governor Kuroda will speak on Monday. A block of Japanese economic statistics is due on Tuesday.
The market’s risk sentiment will also be important for the dynamics of USD/JPY. Chinese National People’s Congress will take place on Saturday. If the nation announces measures to support economy, including fiscal stimulus, the market’s risk appetite will revive reducing demand for the yen as a safe haven.