Forex - USD/JPY dips on jobs data, Chinese factory report supports

Investing.com - The dollar moved lower against the yen on Thursday after a fresh batch of disappointing U.S. employment numbers hit the wire though a better-than-expected Chinese manufacturing barometer enticed investors out of safe-haven yen positions and gave the greenback some support.

In U.S. trading on Thursday, USD/JPY was trading at 97.35, down 0.05%, up from a session low of 97.18 and off a high of 97.62.

The pair was likely to find support at 97.16, Wednesday's low, and resistance at 98.48, Tuesday's high.

In the U.S. earlier, the Department of Labor reported that the number of individuals filing for initial jobless benefits declined by 12,000 to a seasonally adjusted 350,000. Analysts had expected U.S. jobless claims to fall by 22,000 to 340,000 last week.

Earlier this week, the Department of Labor reported that U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.

While the jobs figures painted a picture of a sluggish U.S. economy, the numbers did fuel expectations for the Federal Reserve to continue stimulating the economy with its USD85 billion in monthly bond purchases that drive down interest rates to spur recovery, weakening the greenback in the process.

Many in recent weeks were expecting the Fed to announce plans to taper its asset purchases in late October or early December, though soft jobs data now have market watchers pushing back estimates for a start date to tapering into 2014.

Elsewhere, the preliminary reading of China's HSBC manufacturing index for October rose to a seven-month high of 50.9, up from a final reading of 50.2 in September. Economists had expected the index to tick up to 50.5.

The numbers sparked demand for Asian equities that enticed investors out of the yen despite ongoing expectations that China's central bank may tighten monetary policy soon, which gave the greenback some support against its Japanese counterpart.

The yen was down against the pound and down against the euro, with GBP/JPY up 0.17% and trading at 157.69 and EUR/JPY trading up 0.11% at 134.33.

On Friday, the U.S. is to round up the week with data on durable goods orders, a leading indicator of production, as well as revised data on consumer sentiment from the University of Michigan.

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