The dollar slid in Tokyo trade Friday to the lowest level in about two months, with investors flocking to the safe-haven yen as traders grow nervous ahead of a crucial U.S. payrolls report that will provide fresh clues about the world’s biggest economy.
The dollar briefly fell as low as ¥95.73-74, slipping below ¥96 for the first time since April 5, after standing at ¥96.35-39 at 1 p.m., down from ¥99.26-26 at 5 p.m. Thursday. The dollar fetched ¥96.44, down from ¥97.07 late Thursday in New York, where at one point it sank to ¥95.88. The greenback has lost around 4 percent since the start of the week.
The euro also slid against the Japanese currency to ¥127.69 from ¥128.55 in New York, while it sat at $1.3252 from $1.3243, after the European Central Bank held off fresh stimulus following an interest-rate cut last month.
The benchmark Nikkei 225 index closed down 26.49 points at 12,877.53, clawing back deeper losses earlier in the session, while the Topix index of all first-section shares was down 1.29 percent, or 13.82 points, to 1,056.95.
Friday’s nonfarm payrolls will be used as an indicator for the Federal Reserve’s next policy move, with expectations growing that it will soon begin to roll back on its monetary easing program.
“All eyes will be on the U.S. jobs report . . . as the market adjusts their expectations of the U.S. Fed’s tapering timing,” Credit Agricole said in a note.
Central bank stimulus has helped support stock rallies, but renewed concern about the state of the U.S. economy has stoked risk-aversion, which tends to usher in yen-buying, dealers said.