On the docket we had the ADP non-farm employment change, trade balance, unemployment claims and the ISM non-manufacturing PMI. Most of these readings impressed, and optimism will be quite high as we head into the official non-farm payrolls print.
The market is expecting 226,000 jobs added and for the unemployment rate to fall to 6.1%. Fed commentary was also quite hawkish, with members Mester, Powell, Fisher and Kocherlakota on the wires. That said, USD/JPY was one of the biggest beneficiaries of the developments. The pair rallied to ¥105.71, its highest since September 2008, and continues to look quite bullish in the near term.
While activity is limited on the JPY side of the equation, there is plenty on the USD side that could keep this run going. Buying the dips is likely to remain the preferred strategy, particularly as the pair is not quite in overbought territory just yet. Dips into ¥105.00 will probably be used as a buying opportunity in the short term.