US dollar traded little changed against the Japanese yen on Monday, as Japanese current account surplus widened more than expected in September and investment income overseas increased in value due to weaker yen.
USD/JPY slipped to a session low at 98.92 at 7:00 GMT, after which consolidation followed at 99.18, gaining 0.10% for the day. Support was likely to be found at November 6th low, 98.41, while resistance was to be met at November 7th high, 99.41.
It became clear that Japanese current account, a wider indicator for countrys transnational trade, registered a surplus for an eight consecutive month in September. The figure reached 0.587 trillion JPY in September from 0.162 trillion JPY a month ago, while experts had anticipated a surplus at the amount of 0.401 trillion JPY. Seasonally adjusted current account, however, recorded a deficit of 0.125 trillion JPY in September, while expectations pointed a lesser deficit, 0.097 trillion JPY. Japanese trade balance, a key component of nations current account, recorded a deficit of 874.8 billion JPY in September, down from a deficit of 886.0 billion JPY in August.
“The current account will probably remain in surplus as a robust income surplus will make up for the trade deficits,” said Masamichi Adachi, a senior economist at JPMorgan Chase & Co. in Tokyo, cited by Bloomberg.
The income surplus rose 24.6%, a record level, in September, supported by higher interest receipts and dividends from foreign investments, the same media imparted.
Meanwhile, the greenback remained supported after on Friday the Bureau of Labor Statistics said that employers in the United States unexpectedly added more job positions than projected in October. Non-farm payrolls increased by 204 000 in October, well above the expected 120 000 new jobs and above the revised up number of 163 000 jobs, added in the previous month. This data boosted speculation that the Federal Reserve Bank may consider a pare back of its stimulus program sooner than expected.
The above mentioned report came out one day after it became clear that US economy expanded at a sharper than expected rate during the third quarter of the year. Nation’s Gross Domestic Product rose at an annualized rate of 2.8% in Q3, following the 2.5% expansion in Q2, and marking the best quarterly performance this year. Expectations pointed a 2.0% increase in GDP.
Elsewhere, the yen was lower against the euro, with EUR/JPY cross rising 0.44% on a daily basis to trade at 133.07 at 14:13 GMT. GBP/JPY pair, on the other hand, was down 0.10% for the day to trade at 158.66 at 14:15 GMT.