- USD/JPY gained ground due to the recovery in the US Dollar on Friday.
- Japan’s Current Account Surplus was lower than market expectations, weakening the Japanese Yen.
- US Initial Jobless Claims rose to an eight-month high of 231K, surpassing estimates of 210K.
USD/JPY is retracing its recent losses from the previous session, trading around 155.70 during the European session on Friday. However, verbal intervention from Japanese authorities is expected to curb the upward movement of the USD/JPY pair. Japanese Finance Minister Shunichi Suzuki reiterated on Friday that he is prepared to take necessary measures concerning foreign exchange if deemed necessary.
On the data front, Japan’s Current Account Surplus (YoY) rose to JPY 3,398.8 billion in March from JPY 2,360.0 billion. This marked the 14th consecutive month of surplus in the current account but fell short of the expected increase of JPY 3,489.6 billion. The data showed that capital inflows into Japan were lower than market expectations, weakening the Japanese Yen.
The USD/JPY pair received support from the upward correction in the US Dollar (USD), driven by the hawkish sentiment surrounding the Federal Reserve (Fed) maintaining higher interest rates for an extended period.
However, the Greenback encounters resistance due to lower US Treasury yields, influenced by the lower-than-expected US Initial Jobless Claims data released on Thursday. The US Bureau of Labor Statistics (BLS) reported that the number of individuals filing for unemployment benefits exceeded expectations, with Initial Jobless Claims for the week ending May 3 rising to 231,000, surpassing estimates of 210,000 and increasing from the previous week's reading of 209,000.
Later in the day, the preliminary US Michigan Consumer Sentiment Index for May is scheduled for release, with forecasts indicating a slight decrease. This survey assesses sentiment among US consumers, covering three primary areas: personal finances, business conditions, and buying conditions.
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