The Japanese yen rose across the board on Friday after U.S. employers shed 190,000 jobs in October, sending U.S. unemployment rate to a 26 1/2-year high of 10.2%, much higher than the market's forecast of 9.9%. The weak jobs report increased concerns over the health of U.S. economy and boosted demand for safe-haven assets. Usd/jpy tumbled from 90.86 to 89.60, eur/jpy slumped from 135.15 to 133.20, aud/jpy declined from 83.15 to 82.07 in New York morning.
U.S. President Barack Obama said on Friday that the unemployment rate was a 'sobering' figure that underscored the economic challenges ahead. He also said that he has signed a bill which extended jobless benefits and homebuyer tax credits.
Earlier, euro was confined to a relatively narrow range of 1.4854-1.4884 in Asian session. The single currency dropped briefly but sharply to 1.4814 after the release of the grim U.S. jobs data, however, buying interest on dips lifted euro back to 1.4915 (few pips below this week's 2009 high of 1.4918) as Dow Jones Index staged a recovery after initial decline at the opening, however, euro later retreated and closed at 1.4848. German industrial orders rose by 0.9% m/m in September, slightly less than then economists' forecast of 1.0% gain. The British pound rebounded strongly despite the initial fall from 1.6636 to an intra-day low of 1.6517 immediately after the disappointing U.S. unemployment rate. Cross buying in sterling versus euro also lifted cable as eur/gbp fell from 0.8990 to 0.8932 before recovering. DJI pared early losses and closed up 17points.
Elsewhere in the market, group of 20 finance ministers and central bankers are meeting in Scotland on Friday and Saturday. Foreign exchange rates are not a major topic at this meeting. IMF warned on Friday that the leaders should not choke the emergency support for their economies off too quick as the global recovery was still fragile and dependent on massive injections of public money around the world.
Wednesday will be a holiday in U.S (NYSE, AMEX & NASDAQ open). Data to be released next week include German trade balance, industrial production, Canada housing starts on Monday, Japan current account, Australia NAB business confidence, Japan economic watch, machine tools orders, German CPI, WPI, U.K. BRC retail sales, RICS house price, trade, balance, DCLG house price, German and eurozone Zew survey on Tuesday, Australia Westpac consumer confidence, Japan machine orders, U.K. claimant count, ILO unemployment rate on Wednesday, New Zealand retail sales, Japan domestic CGPI, Australia unemployment rate, eurozone industrial orders, Switzerland Zew index, U.S. jobless claims, Fed budget, Canada new housing price index on Thursday, Japan Capacity utilisation, industrial production, consumer confidence, German and eurozone GDP, U.S. trade balance, University of Michigan survey, Canada trade balance on Friday.