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Yen ends the week on a strong note on BoJ inaction

Yen ends the week on a strong note on BoJ inaction

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The Japanese yen rallied decisively last week, with USDJPY closing at 106.29 on Friday after the Bank of Japan left monetary policy unchanged on Thursday against market expectations that the BoJ would ease monetary policy strongly.

Weekly Review

The key fundamental themes this week were dominated by central bank meetings with the US Federal Reserve, the Reserve Bank of New Zealand and the Bank of Japan all meeting to decide on policy.

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The Week Ahead

The week ahead is marked with Japan closed for the entire week due to local holidays. With the start of a new trading month, the markets will be looking at fresh PMI numbers for April across the manufacturing, services and construction sectors. China starts off the week on Sunday with the release of the manufacturing PMI, which is expected to remain unchanged at 50.2, stalling after rising to 50.2 in March. While Monday is expected to be uneventful with the exception of a report on the US ISM manufacturing PMI, the markets pick up pace from Tuesday with the RBA monetary policy decision. For the moment, no rate cuts are expected at this event. On the labor markets, New Zealand will be releasing its quarterly employment data with the unemployment rate expected to tick higher to 5.40%. From the Eurozone, PPI, retail sales and PMI data will keep the euro busy. The big event for the week ahead will undoubtedly be the US labor report. Ahead of the Friday's payroll data, ADP numbers on Wednesday are expected to show 199k jobs being added in April, while the nonfarm payroll report for Friday is expected to show the US unemployment rate holding steady at 5.0% while the economy is expected to have added 200k jobs in April. At the same time, the Canadian jobs report will also be released with the unemployment rate expected to tick higher to 7.20%.

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