We thought they would be doing more quantitative easing but it looks like they may be doing more on the negative interest-rate front,” said Joseph Capurso, a senior currency strategist in Sydney at Commonwealth Bank of Australia. That’s driving the move lower in the Japanese currency and “if delivered, you’ll get a temporary but significant spike up in dollar-yen.”
The yen dropped 0.8 percent to 110.30 per dollar as of 7:06 a.m. in London, the biggest decline since March 1. Japan’s currency weakened 0.9 percent to 124.68 per euro.
The dollar was almost flat in rangebound Asia trade Friday, with many reluctant to take strong positions ahead of monetary policy meetings in the U.S. and Japan next week.
Investors have shown strong appetite to buy on dips. "But they still can't go dollar long now," given mixed signals about the state of the U.S. economy. "That has caused the dollar to go up and down in a tight range" in recent trade, said Marito Ueda, director at FX Prime byGMO.
China added 3.18 million urban jobs in the first quarter of the year, keeping unemployment levels broadly stable, China’s state-run Xinhua News Agency said Friday citing the Ministry of Human Resources and Social Security.
Unemployment for the first quarter of the year in the world’s second-largest economy stood at 4.04percent, the same rate as that at the end of 2015, but slightly down from 4.05 percent reported in the first quarter last year.
This week, the Chinese government detailed new plans to help workers who were laid off in coal and steel industries after data released April 15 showed that economic growth slowed slightly in the first quarter. Roughly 1.8 million workers are expected to be displaced due to China’s commitment to restructure its coal and steel industry.
The measures, which have been endorsed by seven Chinese ministries, focus on finding jobs for the workers and cushioning the transition as Beijing sees unemployment as a threat to social stability.
“Proper placement of workers is the key to working to resolve excess capacity,” the document issued by the labor ministry, released on April 17, reportedly said.
In March, Chinese Premier Li Keqiang said at the annual Parliament that China will create 10 million new jobs and hold the urban unemployment rate below 4.5 percent in 2016. According to official data, the country added 13 million new urban jobs last year, largely in the service sector.
Oil prices climbed in Asia on Friday, heading for their third weekly gain after OPEC said it was open to fresh calls on freezing output despite the failure to reach a deal at the weekend.
The exporting group's Secretary-General Abdalla El-Badri said it could revive the discussion among members and hold further talks with non-members. OPEC holds its next twice-yearly meeting on June2.
At around 0330 GMT Friday, US benchmark West Texas Intermediate (WTI) for delivery in June was up 54 cents, or 1.25 percent, at $43.72 and Brent crude for June climbed 49 cents, or 1.10 percent, to$45.02 a barrel.
WTI is up more than eight percent and Brent 4.5 percent from last Friday's close.
However, BMI Research warned in a note that the long-running enmity between Iran and Saudi Arabia – who are fighting proxy wars in the Middle East – could prevent any deal being made.
"We believe that Saudi Arabia and Iran's disagreement over oil is a symptom of wider geopolitical tensions between the two, and therefore do not expect a political OPEC agreement to be reached during the June 2 meeting," it said.
"While this recent rally has the potential to run further to the upside ... we believe that it is not yet driven by a sustainable shift in fundamentals," Goldman Sachs analysts said in a note to clients on Friday.
Reference: Bloomberg, Reuters, Agence France-Presse, IBT, NASDAQ
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