News Column

Dollar firm near 102 yen on U.S. labor market improvement

July 4, 2014

Ryotaro Nakamaru

The U.S. dollar stayed firm near the 102 yen line Friday in Tokyo as robust jobs data painted a rosy picture of the U.S. economy.

At 5 p.m., the dollar fetched 102.00-01 yen compared with 102.14-24 yen in New York and 101.92-93 yen in Tokyo at 5 p.m. Thursday. It moved between 101.97 yen and 102.22 yen during the day, changing hands most frequently at 102.15 yen.

The euro was quoted at $1.3591-3592 and 138.63-67 yen against $1.3605-3615 and 139.03-13 yen in New York and $1.3660-3662 and 139.23-27 yen in Tokyo late Thursday afternoon.

The dollar stayed near the level it climbed to overnight in New York after U.S. Labor Department statistics showed a 288,000 increase in nonfarm jobs in June compared with economists' forecasts between 210,000 and 220,000. The unemployment rate also unexpectedly dropped to 6.1 percent from 6.3 percent in the previous two months.

"It's being seen as evidence of the U.S. economy having rebounded in the April-June quarter," said Shinichiro Kadota, foreign exchange strategist at Barclays Bank.

Data last week had disappointed dollar bulls by showing the U.S. economy shrank at an annualized rate of 2.9 percent in the first quarter of 2014.

The U.S. currency came under slight selling pressure in the afternoon as traders locked in gains.

With the U.S. labor market appearing to strengthen, the market will next be looking to June inflation data due later in the month to judge whether prices are in line with the U.S. Federal Reserve's expectations.

"The market is still on the fence whether recent high numbers are just 'noise' as Fed chief (Janet) Yellen said, or if they are accurate representations," said Minori Uchida, head of Tokyo global market research at the Bank of Tokyo-Mitsubishi UFJ.

The euro on Friday stayed at lows reached overnight against the dollar and extended losses against the yen after the European Central Bank kept its ultra-easy monetary policy at a Governing Council meeting on Thursday.

The European shared currency came under further downward pressure in Tokyo Friday afternoon on a report showing new manufacturing orders in Germany fell 1.7 percent in May from the previous month.

U.S. financial markets will be closed Friday for the Fourth of July holiday.

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Source: Japan Economic Newswire

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