The dollar dropped as much as 1.1% to 156.68 yen on Friday after a far weaker than expected U.S. jobs report, falling well below July's 40-year high of 163.99. Nonfarm payrolls fell by 23,000 last month against forecasts for an 80,000 gain, deepening doubts about the path ahead for the Federal Reserve. Japan's finance minister said Tokyo and Washington remain in close contact and would not hesitate to intervene again, days after their coordinated yen-buying operation.
The dollar fell as much as 1.1% to 156.68 yen on Friday, before trading last at 157.16, after a surprisingly weak U.S. jobs report jolted currency markets. The move leaves the dollar well below the 40-year high of 163.99 it hit in July.
Nonfarm payrolls fell by 23,000 last month, reversing a downwardly revised 20,000 gain in June. Economists polled by Reuters had forecast payrolls rising 80,000, with estimates ranging from 10,000 to 140,000.
Lee Hardman, senior currency analyst at MUFG, pointed to a sharp drop in two-year Treasury yields as evidence the currency moves looked fundamentally driven rather than the product of intervention. He said: "It's very rare you get these negative prints". The surprise, he added, had dampened interest rate expectations for the Fed.
It was not immediately clear whether Japanese authorities were involved in Friday's move, though analysts said the weak jobs data alone could be reason enough to sell the dollar.
Just after the report, Japan's finance minister said Tokyo and Washington remain in close contact and would not hesitate to intervene again. The warning follows last Friday's coordinated yen-buying intervention by Japan and the United States, a rare bilateral action to halt the yen's slide.
Source: Investing.com
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