Dollar steady after robust U.S. jobs data, yen wobbles
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SINGAPORE — The dollar held firm on
Monday after a strong U.S. jobs report suggested the Federal
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Reserve could stay hawkish for longer, while the yen was hit by
news that Bank of Japan Deputy Governor Masayoshi Amamiya was
being sounded out to be the next governor.
The Nikkei newspaper reported, citing anonymous government
and ruling party sources, that Prime Minister Fumio Kishida’s
administration was in the final stages of deciding on current
governor Haruhiko Kuroda’s successor along with two new deputy
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governors.
In a news conference on Monday, Deputy Chief Cabinet
Secretary Yoshihiko Isozaki said there was no truth to the
Nikkei report.
The yen weakened 0.42% to 131.75 per dollar,
having touched three-week lows of 132.60 earlier in the session.
“Amamiya has helped Kuroda since 2013 on monetary policies,
and is considered the most dovish among the contenders, which is
thrashing hopes that BOJ policy normalization could progress
under the new chief,” Saxo Markets strategists said.
The BOJ’s loose policy settings have drawn increasing
criticism from many quarters, including opposition politicians
and traders, for distorting market function.
Amamiya played a key role in drafting Kuroda’s asset-buying
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program in 2013 and consistently called for keeping ultra-low
interest rates. But he also said in July the BOJ must “always”
think about the means of exiting ultra-loose monetary policy.
On Friday, the U.S. Labor Department’s closely watched
employment report showed that nonfarm payrolls surged by 517,000
jobs last month. Economists in a Reuters poll had expected a
gain of 185,000.
The dollar skipped higher and was firm on Monday. Against a
basket of currencies, the U.S. currency touched a nearly
4-week high of 103.22 and was last at 103.03. The index had
gained 1.1% on Friday.
The Fed on Wednesday raised rates by 25 basis points and
said it had turned a corner in the fight against inflation,
leading investors to price in a more dovish path going forward.
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But the eye-popping payrolls number along with U.S. services
industry rebound in January have investors questioning that the
Fed is almost done with its monetary tightening policy.
“The worry of course is that the much better than expected
data is bad news if the Fed sees this as bolstering its case of
two more hikes and keeping rates elevated for longer,” said
Tapas Strickland, head of market economics at National Australia
Bank.
Citi strategists said Fed Chair Jerome Powell and the
broader committee are increasingly enthusiastic about the
possibility of a “soft landing” in which inflation dissipates
despite a resilient labor market.
But Friday’s report, Citi said, should make the Fed even
more concerned that labor markets are too tight to be
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consistent with at-target inflation.
Traders are pricing in the Fed’s policy rate to peak at
5.05% in June before the central bank cuts rates in the second
half of the year.
Also boosting the safe-haven dollar was escalating tension
between U.S and China after a U.S. military fighter jet shot
down a suspected Chinese spy balloon off the coast of South
Carolina on Saturday.
The euro was up 0.02% at $1.0795. Europe’s single
currency slid 1% on Friday and touched nearly three-week lows of
$1.07815 earlier in the session.
Sterling last fetched $1.2057, up 0.05% on the day,
having touched a one-month low of $1.2031 earlier on Monday.
The Australian dollar rose 0.36% to $0.694, while
the kiwi was down 0.08% to $0.633.
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Currency bid prices at 0521 GMT
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Euro/Dollar $1.0794 $1.0795 +0.01% +0.76% +1.0800 +1.0782
Dollar/Yen 131.7250 131.1050 +0.41% +0.31% +132.3700 +131.6100
Euro/Yen
Dollar/Swiss 0.9253 0.9260 -0.06% +0.09% +0.9284 +0.9254
Sterling/Dollar 1.2059 1.2049 +0.11% -0.26% +1.2062 +1.2031
Dollar/Canadian 1.3406 1.3400 +0.02% -1.08% +1.3419 +1.3400
Aussie/Dollar 0.6936 0.6924 +0.19% +1.77% +0.6947 +0.6885
NZ 0.6325 0.6328 +0.01% -0.34% +0.6333 +0.6301
Dollar/Dollar
All spots
Tokyo spots
Europe spots
Volatilities
Tokyo Forex market info from BOJ
(Reporting by Ankur Banerjee in Singapore; Editing by Shri
Navaratnam)
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