Yen and Gold ascend as the week begins

By Farah Mourad | 11 March 2024

  • The US stock market correction post-NFP report highlights concerns about employment figures

  • Gold prices continue to rise, close to resistance of $2,200

  • The Bank of Japan is anticipated to potentially normalize monetary policy

In the Asia-Pacific region, trading is showing a mixed performance. Japan's Nikkei and Australia's S&P/ASX 200 are trending lower, while indices from China are making gains. European index futures indicate a lower opening for the session. Major currencies and indices are relatively stable as traders prepare for European trading.

This trend follows a correction in the US stock market after Friday's Non-Farm Payroll (NFP) report, which revealed a notable increase in US employment, surpassing expectations with 275,000 jobs added. However, January's figures underwent a significant negative revision. There's concern that despite the rise in job postings, the increase may not translate directly to higher employment rates. The report also noted a rise in the unemployment rate to 3.9% and a decrease in the wage rate to 4.3%. Notably, the decline in employment for February was significant, with 184,000 fewer employed individuals, this suggests a potential rise in multiple job holders, which may not reflect the true strength of the labor market.


Japan's economy demonstrated resilience, posting growth at an annualized rate of 0.4% in 2023 Q4 quarter, surpassing the initial estimate of a 0.4% decline.
There's a sense of increased momentum for wage hikes at this year's talks compared to last year, signaling a potentially positive shift. The likelihood of the Bank of Japan (BOJ) normalizing monetary policy soon is high, although the timing, whether it will be as early as March or not, remains uncertain.

Last week saw Yen longs finally gaining ground as the currency appreciated by 2% against the US dollar. Last week saw Yen longs finally gaining ground as the currency appreciated by 2% against the US dollar.


In regulatory news, large banks in China are urged to provide enhanced financing support for leading real estate developer Vanke amid reported liquidity issues, prompting a sell-off of shares and bonds.


The precious is trading near $2,180, following a 4.50% surge last week. Today, it rose from USD 2,158 per ounce to above USD 2,190 per ounce, driven by a weak dollar and uncertainty surrounding potential actions by the Bank of Japan.

Looking ahead, markets are awaiting several key data releases for further clarity on market reactions:

US February CPI data (Tuesday)

UK January monthly GDP data (Tuesday)

US February PPI data (Thursday)

US February retail sales (Thursday)