Yen gets some relief as dollar pulls back after private payrolls report
THE yen received some much needed relief on Thursday as the dollar settled back and US Treasury yields moderated after mixed US economic data overnight made investors reduce bets on the Federal Reserve raising interest rates again this year.
The dollar index, which tracks the greenback against six peers, held near overnight levels at 106.53.
The greenback gave up some recent gains after US private payrolls increased far less than expected in September, according to the ADP National Employment Report on Wednesday, although analysts said more evidence was needed to be sure how fast the labour market is cooling.
Longer dated US Treasury yields eased from 16-year highs after the data and remained lower in the Asian morning.
“There are some indications that the US labour market is cooling down further” but it’s still too early to tell, said Moh Siong Sim, currency strategist at Bank of Singapore, putting Friday’s non-farm payrolls under close watch.
“The bigger picture is that the overall US growth has been slowing but it’s been slowing slower than expected.”
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Dollar/yen, which tends to be sensitive to US yields, last traded around 148.43, down almost 0.5 per cent from late US levels, pushing the yen further off this week’s low of 150.165, its weakest since October 2022.
Questions about possible intervention by Japanese authorities sparked after
The yen’s sharp recovery after breaching the 150-line on Tuesday had sparked speculation that Japanese authorities had intervened to support the currency, but Bank of Japan money market data showed on Wednesday Japan most likely had not intervened.
Finance Minister Shunichi Suzuki on Wednesday declined to comment on whether Tokyo had stepped in, and repeated that currency rates must move stably reflecting fundamentals.
Besides the lower US Treasury yields, the yen also drew support from an overnight drop in oil prices, said Kyle Rodda, markets analyst at Capital.com, though he added that it was likely to be a “short-term reprieve.”
Already in the Asian morning, oil prices inched up in early trade, clawing back some of the previous session’s big losses.
Elsewhere, the euro was up 0.18 per cent so far in Asia at US$1.0524, keeping above this week’s fresh low of US$1.0448.
In a Reuters poll, the median view among 20 analysts on how low the euro will go this month was US$1.04, with only one respondent saying the currency would touch parity.
Sterling traded at US$1.2139, steadying from Wednesday’s low of US$1.20385 per dollar.
The Australian dollar fetched US$0.6361, up over 0.5 per cent in early trade, while the kiwi similarly ticked up 0.5 per cent to US$0.5943 against the greenback. REUTERS
Share with us your feedback on BT's products and services
