Can CADJPY Gain Through the Summer?

Can CADJPY Gain Through the Summer?
Friday Canadian jobs printed below expectations with drops in the headline figure and the participation rate. However, the labour market is still fairly robust with the unemployment rate falling again to 4.9%.
The US NFP print however showed a very strong print. The headline beat market’s maximum expectations at 528K vs the maximum expected which was 325K. The unemployment rate also dropped lower to 3.5% vs 3.6% expected. Now this resulted in US yields rising on expectations of a 75 bps rate hike which in turn weakened the JPY.
So, going forward, if the outlook for the CAD remains firm and the US growth outlook does too (strengthening yields and weakening the JPY), CADJPY could see some gains.
CADJPY has a seasonal bias to gain around this time too. Over the last ten years the CADJPY has gained nine times between August 08 and October 04 with an average return of 1.17%. So, should the fundamentals favour continued CAD strength and JPY weakness, be aware of this pattern.
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