News Column

Dollar trades near 102 yen line ahead of U.S. jobs data

February 7, 2014

TOKYO, Feb. 7 -- (Kyodo) _ The U.S. dollar traded around the 102 yen line Friday in Tokyo in sparse trading ahead of the release of all-important U.S. jobs data later in the day.

At 5 p.m., the dollar fetched 102.11-13 yen compared with 102.08-18 yen in New York and 101.49-50 yen in Tokyo at 5 p.m. Thursday. It moved between 101.94 yen and 102.24 yen during the day, changing hands most frequently at 102.02 yen.

The euro was quoted at $1.3586-3588 and 138.73-77 yen against $1.3585-3595 and 138.72-82 yen in New York and $1.3525-3526 and 137.27-31 yen in Tokyo late Thursday afternoon.

Market players caught their breath in Tokyo trading after the dollar's jump against the yen overnight in New York. The U.S. currency strengthened on news of a decline in initial claims for unemployment benefits in the country, dealers said.

Now attention is riveted on the release later Friday of U.S. nonfarm payroll data for January, viewed as evidence of whether the U.S. recovery is faltering or not.

The average market forecast is for a 180,000 net increase in jobs, but special factors such as a severe cold weather in recent months make accurate predictions difficult, said Toru Moritani, chief market economist at Sumitomo Mitsui Banking Corp.

"Everyone knows recent jobs data are warped," Moritani said. "But even though it's impossible to tell just how warped the data are, people will take them as an indicator" of U.S. economic health.

The U.S. December jobs data were especially weak, showing a mere 74,000 increase. "Even if the January numbers are weak, say around 150,000, if they come with a significant upward revision for December, the market will see that as a net positive," said a senior dealer at a major Japanese bank.

Weak payrolls results would lead market players to look for hints of a change of pace in the U.S. Federal Reserve's tapering of stimulus when new Fed Chair Janet Yellen testifies before the U.S. Congress next week, the senior dealer said.

The euro held firm after advancing against the dollar and the yen overnight on the European Central Bank's decision to leave its benchmark interest rate at a record-low 0.25 percent.

Recent low inflation numbers from the eurozone had led to speculation of further easing measures, but ECB President Mario Draghi said in a press conference Thursday the central bank would wait until further information on prices and economic growth comes out in early March.

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Source: Japan Economic Newswire

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