News Column

Dollar steady in lower 102 yen amid post-U.S. jobs data caution

July 6, 2014

The U.S. dollar held steady in the lower 102 yen range in Tokyo on Monday morning as traders awaited clues to the lasting impact of last week's upbeat U.S. jobs data on monetary policy in the world's largest economy.

At noon, the dollar fetched 102.15-23 yen compared with 102.00-01 yen at 5 p.m. Friday in Tokyo, after edging up in overseas trading. The New York market was closed Friday for the Independence Day holiday.

The euro was quoted at $1.3584-3585 and 138.76-77 yen against $1.3591-3592 and 138.63-67 yen in Tokyo late Friday afternoon.

The dollar maintained its buoyancy on optimism about U.S. economic recovery after jumping from the upper 101 yen range on Thursday in New York following the jobs data, but Tokyo traders held off on pushing it any higher, dealers said.

The traders awaited clearer signs of whether a sunny jobs outlook will spur the U.S. Federal Reserve to bring interest rate hikes forward, said Yuzo Sakai, manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow.

The dollar was buoyed Thursday as June nonfarm payrolls grew by a bigger-than-expected 288,000 jobs and the unemployment rate shrank from May's 6.3 percent to 6.1 percent.

But "other U.S. figures including labor market participation and wages haven't quite caught up, so it's hard to tell if we will get a dramatic response from the Fed," Sakai said.

"Traders are holding off on bold dollar buying ahead of the (Federal Open Market Committee) minutes out Wednesday which should illuminate feelings within the Fed about its outlook, with signs of hawkish sentiment in the minutes likely to drive up U.S. bond yields and uplift the dollar against the yen," he said.

"The response of New York markets opening tonight after taking Friday off will be important too, and with the Dow (industrial stock average) having cleared 17,000 for the first time on Thursday, the question is whether it can find a stable footing there."

In particular focus are Fed vice chair Stanley Fischer's comments after taking the post last month, with Fischer widely seen as more hawkish than Fed chief Janet Yellen, Sakai added.

The euro remained weighed down against the dollar in the aftermath of Friday's 1.7 percent decrease in German manufacturing orders in May, with expectations picking up of added easing by the European Central Bank, Sakai said.

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Source: Japan Economic Newswire

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