Dollar bounces as US jobs growth beats expectations

[NEW YORK] The dollar jumped on Friday (Sep 4) after data showed that employers added 162,000 jobs in August, well above the 56,000 additions expected by economists.

The data follows after an unexpected 23,000 job decline in July. The unemployment rate held steady at 4.1 per cent.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was last up 0.37 per cent on the day 99.33, with the euro down 0.28 per cent at US$1.1592.

The Japanese yen weakened 0.41 per cent to 156.45 per dollar.

The yen has risen more than 2 per cent this week, its biggest weekly gain since late July, when Japan and the United States conducted a rare joint intervention to halt a relentless slide in the Japanese currency.

With a lack of evidence of official action, analysts say the sudden jump in the yen largely reflects a growing expectation that the Bank of Japan could be more hawkish than previously expected when it meets on September 17 to 18.

Japan’s top currency diplomat Atsushi Mimura said on Friday he remained alert to exchange-rate moves and was in constant contact with US authorities, keeping markets alert to the chance of another round of official yen buying.

“I think the market is getting a little bit more jittery about what might be forthcoming effectively, and potentially the intervention threat is still there,” said Ray Attrill, head of FX strategy at National Australia Bank.

“Unless we get some significant policy surprises, or much more aggressive intervention by the US Fed on behalf of the yen, our view at the moment is that we are unlikely to see a sustained move below 155, at least not in the coming weeks,” he added.

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JPMorgan said expectations for Japanese pension funds repatriation and BOJ rate hikes “look somewhat overdone” at the moment, but added that an unwinding of an estimated 16 trillion to 17 trillion yen (US$102.36 billion to US$108.76 billion) in yen shorts could send the dollar to a 142–146 range against the Japanese currency.

The options market suggests that traders are at their most bullish towards the yen over a three-month horizon since May 2025 – excluding the days around the last bout of intervention in late July that sent the currency soaring against the dollar. REUTERS