THE TAKEAWAY: [U.S. Initial Jobless Claims decreased to 341,000] > [Dismissals are in a slower pace, hiring continues increase] > [USDJPY Bullish]
Applications for unemployment insurance payments dropped more than expected in the week ended February 9, which is the second decrease since January 25. According to a report issued by Labor Department in Washington today, jobless claims fell by 27,000 to 341,000 unexpectedly. Initial claims from two week ago were revised upwardly to 368,000 from an initially reported 366,000. Economists polled by Bloomberg News had forecasted a drop to 360,000. Meanwhile, the continuing job claims fell to 3,114,000, the lowest level since July 2008.
The better-than-expected readings today signal that the outlook of US labor market is more positive and may continue recovery with stronger job growth which will boost economy to next stage. Personal consumptions are likely to expand as well, as the increase in hiring will help ease the burden of higher payroll taxes on household budget.
USDJPY 1-minute Chart: February 14, 2013
Chart created using Market Scope – Prepared by Renee Mu
Following the data release, the greenback rallied against its major currency peers. The U.S. dollar strengthened against the Japanese yen to 98.38 as can be seen in the one-minute chart above. At the time of this report, the USDJPY was trading lower at 93.26 yen.
--- Written by Renee Mu DailyFX Research