The Dollar Strengthens on Better Than Expected Data

The Dollar/Yen had a turn for the better on Friday as investors began to speculate that the decrease in unemployment could lead the Fed to raise interest rates sooner than expected. Friday’s session was a classic “buy the rumor, sell the fact”. Furthermore, news earlier last week mentioned that the Bank of Japan plans to introduce new liquidity measures to combat falling prices. Under the new program, the BoJ will provide JPY10 trillion of three-month loans to commercial banks at a fixed rate of 0.1%. In exchange, banks will provide regular BoJ collateral. The decision was unanimous but the BoJ had come under heavy pressure from the government to cooperate in battling deflation. The USD/JPY surged on Friday, to break trend line resistance at 89.50.



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