USD/JPY: Trading the JOLTS Job Openings

JOLTS Job Openings measures the number of employment openings  each  month, excluding the farm industry. A reading which is higher than the market forecast is bullish for the dollar.

Update:  US JOLTs 4998K – just below predictions  

Here are the details and 5 possible outcomes for USD/JPY.

Published on Tuesday at 14:00 GMT.

Indicator Background

Job creation is one of the most important leading indicators of overall economic activity. Thus, publication of employment data, such as the JOLTS Job Openings,, is highly anticipated by the markets, and the indicator can have a strong impact on the direction of USD/JPY.

JOLTS Job Openings  has now risen for three straight readings,  reflective of  the improving US labor market. The indicator rose to 5.03 million in the December report, matching the forecast. Little change is expected in the January release, with the estimate standing at 5.04 million.

Sentiment and Levels

After strong gains last week,  USD/JPY  is once again enjoying the  view  above the 120 line, but it has had difficulty maintaining this level in the past. Still, the US economy is in good shape and the dollar is benefitting from increased speculation about a mid-year rate hike thanks to strong employment numbers.  So, the sentiment  is bullish  on USD/JPY towards this release.

Technical levels from top to bottom: 1.2416, 1.2219, 1.2139, 1.1988, 1.1794 and  1.1682.

5 Scenarios

1. Within expectations:  5.00M to 5.08M: In this scenario, USD/JPY could show some slight fluctuation, but it is likely to remain within range, without breaking any levels.
2. Above expectations:  5.09M to 5.12M: A reading above expectations would signal economic expansion, and could push the pair  above one  resistance line.
3. Well above expectations: Above 5.12M: A sharp rise in employment numbers could push USD/JPY  above a second resistance line.
4. Below expectations:  4.95M to 4.99M: A weak reading could push the pair downwards, with one  support level  at risk.
5. Well below expectations: Below 4.95M:  In such  a scenario, USD/JPY could break a second support level.

For more on the yen, see the  USD/JPY forecast.

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