USD/JPY trades above163.90 on Thursday as the US Dollar (USD) strengthens following significantly better-than-expected United States (US) labor market data.
US Initial Jobless Claims fell to 187K in the week ending July 18, well below market expectations of 212K and the previous revised reading of 209K
The result marked the lowest level since 1969, suggesting that layoffs remain extremely limited despite signs of slower hiring. The resilient figures could reinforce expectations that the Federal Reserve (Fed) will maintain a restrictive monetary policy stance for longer. US Treasury yields and the broader Dollar Index moved higher, the latter up 0.4%, following the release, providing additional support to USD/JPY.
Investors will now focus on Japan’s National Consumer Price Index data for June, due later on Thursday. Core inflation, which excludes fresh food, is expected to accelerate to 1.6% YoY from 1.4%, partly due to higher energy prices. Headline inflation previously stood at 1.5%, while the index excluding food and energy was 1.8%.