THE TAKEAWAY: [U.S. Initial Jobless Claims fell more than expected; Continuing Claims increased] > [Job claims plunge reflects unwinding of seasonal swings] > [USDJPY Bullish]
Applications for unemployment insurance payments fell more than expected in the week ended April 6 following hitting the highest level in four months. According to a report issued by Labor Department in Washington today, jobless claims dropped by 42,000 last week to 346,000 unexpectedly, while the initial claims from two week ago were upwardly revised to 388,000 from 385,000 initially reported. Economists polled by Bloomberg News had forecasted a drop to 360,000. Meanwhile, the continuing claims climbed to 3,079,000, beating the consensus forecast of 3,067,000.
The amount of Americans filled claims plunged last week unwinding seasonal swings caused by the Easter holiday and spring breaks at school. As Easter falls on different weeks from year to year, it is difficult for the government to adjust the data. The picking up in the US labor market shows some slow down recently with increased volatility in hiring data. Sustained improvement in employment is needed to spur consumer spending, which attributes the most to the US economy.
USDJPY 1-minute Chart: April 11, 2013
Chart created using Marketscope 2.0– Prepared by Renee Mu
In the minutes following the data release, the U.S. dollar gained against its Japanese counterparty, with USDJPY rallying to 99.49. Yet as markets corrected, the greenback quickly pulled back to the level before the data release. At the time of this report was written, the USDJPY was trading lower at 99.38 yen.
--- Written by Renee Mu DailyFX Research