USD/JPY: Will NFP Trigger A Recovery? – Barclays

The jobs report is already causing tension in the markets. We previewed the event with EUR/USD[1]. Here is a view on the impact on USD/JPY:

Here is their view, courtesy of eFXnews:

Barclays Capital FX Strategy Research argues that the path of USD/JPY is likely to depend on the durability of the ongoing global cyclical recovery and whether foreign central banks fulfill their hawkish shift in communication by action.

We continue to look for medium-term JPY appreciation, given the extended undervaluation of the JPY despite Japan’s closed output gap, large current account surplus, and Japanese investors turning more cautious towards foreign investment.

Heading into the US jobs report on Friday, Barclays argues that it will unlikely change the path for Fed policy and the overall USD trend.

We and the consensus expect July NFP to have increased 175k with wages growing 0.3% m/m,” Barclays projects.

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