USD/JPY edges higher, US jobs report ahead

US dollar edged higher against the Japanese yen on Tuesday amid optimism that the upcoming report on US non-farm payrolls will probably show private sector added more job positions in September in comparison with a month ago.

USD/JPY touched a session high at 98.36 at 4:00 GMT, after which consolidation followed at 98.31, gaining 0.14% for the day. Support was likely to be found at October 21st low, 97.76, while resistance was to be encountered at October 15th high, 98.69.

Employers in the US private sector probably added more job positions in September than in August, while the rate of unemployment remained at the lowest level since 2008. Non-farm payrolls increased by 180 000 in September, marking their highest level since April, following the 169 000 new jobs added in August, in accordance with the median estimate of 93 respondents in a survey by Bloomberg News. However, the projected increase in payrolls during September would still be below the average monthly increase of 195 000 during the first six months of this year. Through August, the United States had managed to recover 6.8 million of the 8.7 million lost jobs due to the 18-month recessionary period, which ended in June 2009.

At the same time, the US dollar lost ground against its major peers last week, as concerns appeared that the recently ended partial government shutdown will cause an impact upon the US Gross Domestic Product during the final quarter of the year and also urge the Federal Reserve Bank to delay its plans of scaling back the monthly pace of its monetary stimulus. The central bank will probably delay the first reduction of its asset purchases until March 2014, according to the median estimate of 40 experts in another survey. Poll’s results in September showed that the first cut would occur in December.

Meanwhile, In Japan, an official government report will probably reveal on October 25th that Japanese index of consumer prices, excluding prices of fresh food, increased 0.7% during September on annual basis, according to preliminary estimates. The rate of inflation climbed to 0.8% in August, recording the largest increase since November 2008.

In addition, analysts project that the USD/JPY cross may trade at 101.00 by December 31st, as the preceding year-end estimate was 105.0, according to a poll conducted in August.

Elsewhere, the yen was lower against the euro, with EUR/JPY cross gaining 0.10% on a daily basis to trade at 134.49 at 8:13 GMT. GBP/JPY pair was steady, up 0.05% to trade at 158.65 at 8:15 GMT.