The US dollar has depreciated since yesterday after a weekly jobless claims report and due to European central bank bond purchases. Last Friday, it sank to the lowest since Aug.3 when the US economy created the lowest level in seven months, reducing the chances of an immediate cut in the central bank’s asset-purchase program. Since then, several officials have volunteered to recommend a tape this year, including central bank governor Michelle Bowman, who said overnight that the week August labor report would not leave the central bank’s course.

Data on Thursday showed that the number of Americans filing weekly unemployment claims fell to an 18-month low, dispelling fears of a slower economic recovery, but raising concerns that the federation may move faster than expected to measure its accommodating policies. The Department of Labor said initial demands for state unemployment benefits fell to 35,000 for the week ending Sept. 4, the lowest level since mid-March 2020. It suggested that job growth could be hampered by labor shortages rather than cooling demand for workers.

Treasury Secretary Janet Yellen told U.S. financial regulators on Thursday that there could be “financial stability impacts” if Congress fails to meet the country’s debt ceiling. The Treasury Department said in a statement that the fall was due to the failure to raise the “timely manner” limit on topics raised at a private meeting of the Financial Stability Oversight Council. Yellen campaigned for congressional action and warned that the Treasury would reach the borrowing limit next month.

The Council of Regulators, including the heads of the Federal Reserve, the Securities and Exchange Commission and the Office of the Currency Controller, is leading the risk of causing another financial crisis. The panel discussed the commercial real estate market and listened to a presentation from the Federal Reserve Bank of New York on business trends and “potential risks to various real estate and business risks”. At the behest of President Joe Biden, the Council is also working on a report assessing how the upcoming climate change in November could shake the financial system.

In Japan, when asked about the proposal of Sanae Takaichi, who is running for the leadership of the ruling party commented thay the primary budget-balance target should be set aside until 2% inflation is completed. Finance Minister Taro Aso said on Friday that Japan should not target its public funds for testing “loose monetary policy” such as “modern monetary policy”.

The euro was supported after the European Central Bank said it would reduce emergency bond purchases in the coming quarter. That forecast path indicates that the ECB will withdraw the stimulus very cautiously and that the interest rate hike is far from over. The coming months will focus on how to deal with the expected outcome of the PEPP in the coming months (a temporary, epidemiological facility). An abrupt end would cause a sudden tightening of monetary conditions and undermining growth and inflation expectations,”ANZ Bank analysts explained.

Overall, the market was more limited than the Fed this month, wondering when the Fed will measure the massive measures taken last year to protect the economy from the corona virus pandemic. Meanwhile, the greenback was put on the pressure over European Central Bank, which recovered during the US period before the Treasury yield fell after the US government saw strong demand for the sale of 30-year bonds. The Treasury completed $ 120 billion in coupon-bearing deliveries scheduled for this week.

USD/JPY 4 Hour Chart:

Support: 109.48 (S1), 109.22 (S2), 108.83 (S3).

Resistance: 110.13 (R1), 110.53 (R2), 110.79 (R3).

Amidst this above catalysts the US dollar is under pressure. We expect a bearish trend for USD/JPY.