News Column

Dollar nears 103 yen on U.S. jobs data optimism

August 1, 2014

Ryotaro Nakamaru

The U.S. dollar rose to just below 103 yen on Friday in Tokyo on mounting optimism that a U.S. jobs report due later in the day would show continued improvement in the U.S. economy.

At 5 p.m., the dollar fetched 102.94-96 yen compared with 102.75-85 yen in New York and 102.86-87 yen in Tokyo at 5 p.m. Thursday. It moved between 102.75 yen and 102.99 yen during the day, changing hands most frequently at 102.90 yen.

The euro was quoted at $1.3379-3380 and 137.73-77 yen against $1.3385-3395 and 137.60-70 yen in New York and $1.3395-3397 and 137.78-82 yen in Tokyo late Thursday afternoon.

The dollar inched up ahead of the release of the July report on the U.S. labor market, which some economists expect to show that employers added to nonfarm payrolls by more than 200,000 for the sixth straight month.

The U.S. unemployment rate is likely to stay near last month's 6.1 percent, the lowest since 2008, putting the focus on whether wages reflected the recent apparent rally in the jobs market, dealers said.

"If the numbers are strong all around, the dollar should settle above 103 yen," said Toru Moritani, chief market economist at Sumitomo Mitsui Banking Corp.

A boost in wages may also fuel speculation that the U.S. Federal Reserve may raise its benchmark interest rate sooner than previously thought.

The Fed's policy committee reiterated Wednesday that it will keep the rate at near zero for some time, but Chair Janet Yellen has in the past said favorable developments in the labor market and inflation could cause the central bank to bring the timing forward.

The euro fell slightly against the dollar in Tokyo after a flash estimate showed inflation in the eurozone lagged at an annualized 0.4 percent in July, far below the European Central Bank's target of just below 2 percent.

"The euro remains on a downtrend," said Kengo Suzuki, chief foreign exchange strategist at Mizuho Securities Co. "The weak reading adds to the view the ECB will act with further easing in the future."

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Source: Japan Economic Newswire

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