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Forex pairs in this Article » EUR/JPY, USD/JPY
FXstreet.com (Barcelona) - Analysts at the Bank of Tokyo Mitsubishi UFJ believe that the recent positive ISM and ADP numbers have helped encourage dollar buying.

They see this as adding to the support for USDJPY is the growing market expectation that the BOJ may implement further monetary easing at its meeting at the end of October. They write, "The yen is also being undermined by the fact that on balance the markets remain more in risk-on mode on continued hope that the OMT plan of the ECB will bring a period of stability in Europe." Their expectation is of a continuation next week which will help to keep the yen under selling pressure.

However, they add that they assume that the NFP is broadly similar to the picture from the ADP report - a growing labour market but only modest growth, which will limit the upside for USDJPY much above the 79.00 level and surprise weakness in payrolls tomorrow will mean USDJPY levels below 78.00 come back into play next week.

They finish by stating that, "We don't expect increased volatility due to the G-7 finance ministers meeting in Tokyo, although an announcement that Japan will be a willing buyer of ESM bonds may have a temporary supportive impact on EURJPY."
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