News Column

Dollar stays in upper 101 yen before U.S. jobs data, ECB meeting

July 3, 2014

Ryotaro Nakamaru

The U.S. dollar stayed on a firm note in the upper 101 yen zone Thursday in Tokyo, although trading tapered off in the afternoon as market players waited for June U.S. jobs data and the European Central Bank's policy meeting later in the day.

At 5 p.m., the dollar fetched 101.92-93 yen compared with 101.72-82 yen in New York and 101.49-50 yen in Tokyo at 5 p.m. Wednesday. It moved between 101.77 yen and 101.94 yen during the day, changing hands most frequently at 101.85 yen.

The euro was quoted at $1.3660-3662 and 139.23-27 yen against $1.3655-3665 and 138.94-139.04 yen in New York and $1.3670-3672 and 138.74-78 yen in Tokyo late Wednesday afternoon.

The dollar inherited upward momentum against the yen from New York trading overnight where Automatic Data Processing Inc.'s report on U.S. private-sector nonfarm payrolls showed a much-larger-than-expected increase of 281,000 jobs in June.

The ADP number raised expectations for the Labor Department data due out later Thursday, pushing up U.S. Treasury yields and drawing traders to the dollar's higher interest rates against the yen, said Yuji Saito, executive director of foreign exchange at Credit Agricole Corporate & Investment Bank in Tokyo.

But market participants grew cautious in the afternoon in Tokyo ahead of the Labor Department's report and the ECB meeting.

"If the jobs data don't disappoint, we should see the dollar go above 102 yen," said Toru Moritani, chief market economist at Sumitomo Mitsui Banking Corp.

He added even a reading within market forecasts of between 210,000 and 220,000 job additions would dispel worries of a flagging U.S. economy after U.S. gross domestic product data last week showed an annualized 2.9 percent contraction in the first quarter of 2014.

The euro was flat against the dollar and rebounded against the yen after slipping versus both currencies overnight amid speculation that ECB chief Mario Draghi would verbally undercut the shared currency at a press conference following the central bank's meeting in Frankfurt.

The ECB is expected to leave monetary policy untouched after announcing a wide range of easing measures at its June meeting.

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Source: Japan Economic Newswire

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