USD/JPY has continued where it left off on Friday, as the pair as lost ground on Monday. In the North American session, the pair is trading at 110.87, down 0.20% on the day. Earlier in the day, the pair touched a low of 110.28, its lowest level since March 28. It’s a quiet start to the week on the fundamentals front. There are no data releases in the U.S. In Japan, Final Manufacturing PMI is expected to improve to 49.5. On Tuesday, the U.S. releases JOLTS Job Openings and the BoJ releases the minutes of its March meeting.
President Trump sent the equity markets sharply lower on Monday, after threatening to raise tariffs on $200 billion worth of Chinese goods as early as Friday, from 10% to 25%. Trump sounded nonchalant about the trade talks, saying that even if an agreement wasn’t reached, the U.S. would benefit from the new tariffs. This has boosted the yen, as nervous investors seek safe-haven assets such as the yen. China has threatened to cancel the talks, so traders should be prepared for some swings in the currency markets in the coming days.
On Friday, the focus was on U.S. employment data in April. The numbers were mixed, as nonfarm payrolls were strong, but wage growth remained soft. Average Hourly Earnings edged up to 0.2%, up from 0.1%. However, this missed the estimate of 0.3%. Nonfarm payrolls sparkled, climbing to 263 thousand, up from 196 thousand a month earlier. The reading easily beat the forecast of 181 thousand. The unemployment rate dipped to 3.6% in April, down from 3.8% a month earlier. This marked the lowest unemployment rate since 1969.
