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What’s up, fellow forex traders? It’s time to get updated on the latest jobs data for the other major economies with the second part of my Global Jobs Update! And if you missed it, you can check Part I right here.

Today, I’ll be dissecting the jobs reports from Japan, Australia, New Zealand, and Canada.


The May jobs data for Japan is finally out, and it shows that Japan’s seasonally-adjusted jobless rate for May remained unchanged at 3.3%, a record-low level not seen since April 1997. Even better is the fact that the labor force participation rate actually went up to 59.8% from 59.4%. We don’t have the most recent data for wage growth, but we have seen May’s household spending jump by 4.8% year-on-year (-1.3% previous) despite the 8% consumption tax, and that is a very good sign.

Sweet! So what does it mean for the yen? Not much, that’s what. Japan’s export-driven economy is geared more towards industry spending rather than consumer purchases. In addition, even though Bank of Japan (BOJ) Governor Kuroda remarked in a June 10 speech to parliament that the yen “is unlikely to weaken further in real effective terms,” the fact remains that the BOJ decided on June 19 to maintain the current monetary policy of increasing the monetary base at an annual pace of 80 trillion yen while holding interest rates at around zero percent.


Australia’s May jobs report shows that the seasonally-adjusted jobless rate was brought down from 6.1% to a one-year low of 6.0%. The individual components of the report paint an even better picture since the labor force participation rate held steady at 64.8%. Also, employment saw a 42.0K jump, with full-time jobs going up by 14.7K. Unfortunately, the previous month’s reading was revised downward from a mere 2.9k jobs lost to a painful 13.7K drop. Overall, Australia’s jobs data is pretty stellar. Except, not really.

As I discussed in my blog entry for Australia’s May jobs data, the Australian Bureau of Statistics (ABS) has suffered a budget cut and was forced to downsize its personnel, which is probably why we have been seeing a lot of revisions lately. This calls into question the reliability of data that ABS has been generating, including the recent, very optimistic jobs data. Furthermore, the Reserve Bank of Australia (RBA) admitted in its recent monetary policy statement that “slow growth in labour costs” is one of the major reasons for keeping rates at record-low levels. While we don’t have the most recent wage growth data yet, the historical trends ain’t so pretty.

Australian Wage Growth

In my economic data roundup for Australia, I pointed out that consumer spending and sentiment are starting to deteriorate, so perhaps Q2 wage growth won’t be very promising. And as long as wage growth remains subdued, we’ll probably see rates at record-low levels and weaker demand for the Aussie. And don’t forget RBA Governor Glenn Steven’s June 10 statement saying that the RBA remains “open to the possibility of further policy easing.”

New Zealand

New Zealand reports its jobs data on a quarterly basis, so we only have the data for Q1 2015 to work with. New Zealand’s employment growth showed a mere 0.7% increase (0.8% expected, 1.2% previous) while the jobless rate also remained flat at 5.8%. Note, however, that the labor force participation rate increased by 0.2% to 69.6% despite the addition of 19.0K people into the labor force, which means that the economy was able to absorb the new workers rather well.

Okay, everything looks good so far, but does the labor cost index, which only grew by 0.3% (0.4% expected, 0.5% previous), offset this? Nope! While wage growth was rather low, it was still above CPI (0.1% for March quarter) so real wages (wages adjusted for inflation) were still increasing.

So is the Kiwi poised to get stronger? Probably not. Remember, the Reserve Bank of New Zealand (RBNZ) cut rates in June (Hah! Called it!), citing “low inflationary pressures and the expected weakening in demand.” Also, the RBNZ opined that the Kiwi is overvalued, stating that a “further significant downward adjustment is justified.” I’ve even listed 5 reasons why the RBNZ will probably have cut rates again sooner or later.


Canada’s May jobs report is very promising, with employment increasing by 59.0K and full time jobs increasing by 30.9K. The jobless rate also remained on hold at 6.8% for the fourth consecutive month while the labor force participation rate ticked higher to 65.9% from 65.8%. Also, wage growth in May jumped by 2.9% relative to last year. Overall, Canada’s labor market looks pretty robust, although energy-rich areas were actually suffering. Alberta, for example, saw the jobless rate in May climb up by 0.3% to 5.8%.

So are we gonna be seeing a strong Loonie? Maybe, maybe not. While the overall labor data is good, one must remember that Canada has an export-driven economy. And 25% of Canada’s exports are energy commodities (e.g. oil). And that energy-rich provinces aren’t doing very well. Yikes!

Apart from that, a strong Loonie would make Canada’s exports less competitive. In its latest monetary policy statement, the Bank of Canada (BOC) also hinted that a strong Loonie could be a problem when it stated that the “Canadian dollar has strengthened in recent weeks in the context of higher oil prices and a softer U.S. dollar. If these developments are sustained, their net effect will need to be assessed as more data become available in the months ahead.”

Based on the jobs data above, which currency do you think will be the strongest in the coming months? Cast your votes in our poll below!