US dollar slips vs yen, Trump seen challenging Japan on trade issues

[TOKYO] The US dollar slipped against the yen on Friday after a report suggested that Japan would be the next country with which US President Donald Trump will take up trade issues.

The US currency was also lower against other major peers such as the euro and pound, with the market bracing for the highly anticipated US jobs report due later in the session.

According to CNBC television, President Trump hinted to a Wall Street Journal columnist that he might next take up trade issues with Japan.

Mr Trump has already challenged China, Mexico, Canada and the European Union on trade issues. He has repeatedly accused other countries of devaluing their currencies and putting the United States at a disadvantage.

The US dollar extended overnight losses and last traded at 110.44 yen for a loss of 0.3 per cent.

"In addition to dollar/yen, other currencies have also declined against the yen. Although the real motive behind Trump's comments is still unclear at this stage, the market has taken note of the possibility of Japan being affected by a broader trade conflict," said Shusuke Yamada, currency and equity strategist at Bank of America Merrill Lynch in Tokyo.

The euro was down 0.25 per cent at 128.335 yen, and the pound had shed 0.3 per cent to 142.72 yen.

The US dollar index against a basket of six major currencies was little changed at 95.014 after losing about 0.2 per cent on Thursday, pulling further back from a two-week peak scaled on Tuesday amid turmoil in emerging market currencies.

In focus was the August US non-farm payrolls report due at 1230 GMT. The US economy is expected to have added about 191,000 jobs in August, with average earnings at 0.2 per cent month-on-month compared to 0.3 per cent from July.

The Federal Reserve is poised to hike interest rates this month, its third monetary tightening move in 2018, and the employment data is expected to shape investors' near-term outlook on interest rates.

The euro was nearly flat at US$1.1622, having gained about 0.15 per cent this week.

The pound was steady at US$1.2924 after rising 0.15 per cent the previous day. Sterling was down 0.3 per cent on the week.

The Australian dollar was 0.2 per cent lower at US$0.7183, edging back towards a two-year low of US$0.7145 plumbed on Wednesday against a broadly stronger greenback.

China's yuan was slightly stronger at 6.8402 in offshore trade, reversing the previous day's modest losses.

REUTERS