Yen Slides As Traders Focus On U.S. Jobs Data

(RTTNews) - The Japanese yen came under pressure against other major currencies in the early European session on Friday, as trader's focus on the U.S. jobs data for March due later in the day. Meanwhile, the markets are closed on account of Good Friday holiday today.

Traders remain cautious ahead of the unemployment and payrolls data from the U.S. due later in the day, as it would provide guidance on the strength of the labor market. The unemployment rate is seen steady at 3.6 percent whereas addition to nonfarm payrolls is seen at 239,000 compared to 311,000 a month earlier.

The Japanese central bank's holdings of Japanese government bonds (JGBs) hit a record at the end of March.

The Bank of Japan's government bond holdings swelled to 581.72 trillion yen ($4.4 trillion) as of March, a record for any fiscal year-end.

The 30-year JGB yield fell 3.5 basis points to 1.305% and the 40-year JGB yield fell 4 bps to 1.500%.

Sentiment among traders weakened after BoJ Governor Haruhiko Kuroda delivered his last press conference. The term of the longest serving governor comes to an end tomorrow. His successor, Kazuo Ueda, will become BOJ chief on Sunday. Ueda's first policy meeting will be held on April 27-28.

Speaking at his retirement news conference, BoJ's Kuroda said, "Japan is seeing a broadening trend where rising inflation is being reflected in wages."

"Japan has made steady progress toward sustainably, steadily achieving BoJ's price target.", he said.

In economic news, data from the Ministry of Health, Labor, and Welfare showed that Japan's real wages declined for the eleventh straight month in February weighing heavily on household spending. Inflation adjusted real wages decreased 2.6 percent annually, but the pace of decline slowed from the 4.1 percent drop in January. Real wages have been falling since April 2022.

Official data released earlier today showed that household spending was up 1.6 percent in February following the 0.3 percent contraction in January.

Japanese Prime Minister Fumio Kishida had urged business leaders to hike salaries to help employees to fight high cost of living. Many large companies are planning to lift salaries by more than 3 percent this year, which is likely to lift wage growth.

The BoJ continued to maintain an ultra-loose monetary policy under the leadership of Haruhiko Kuroda. Markets expect a change in the strategy after Kazuo Ueda takes office next week.

Data from the Cabinet Office showed that Japan's leading index improved in February to the highest level in four months. The leading index, which measures future economic activity, rose to 97.7 in February from a 26-month low of 96.6 in the previous month.

The coincident index that measures the current economic situation also rose to 99.2 in February from 96.4 in January.

In the European trading, the yen fell to 3-day lows of 131.95 against the U.S. dollar and 145.95 against the Swiss franc, from early highs of 131.56 and 145.45, respectively. If the yen extends its downtrend, it is likely to find support around 135.00 against the greenback and 148.00 against the franc.

Against the euro and the pound, the yen dropped to 2-day lows of 144.01 and 164.28 from early highs of 143.62 and 163.68, respectively. The yen may find support around 146.00 against the euro and 168.00 against the pound.

Against the Australia, New Zealand and the Canadian dollars, the yen edged down to 88.18, 82.56 and 97.77 from early highs of 87.82, 82.21 and 97.52, respectively. On the downside, the yen is likely to find support around 92.00 against the aussie, 84.00 against the kiwi and 99.00 against the loonie.

Looking ahead, U.S. unemployment rate and non-farm payrolls for March are due to be released at 8:30 am ET.