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Dollar dives, tests under ¥96 level

AFP-JIJI, JIJI

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.

  • Sho Takeda

    Hmm…I’m living in US and I’m from Japan. So it’s good news for me to live here. Btw the problem is, most Japanese ppl dont know the fact that yen is safe currency, which we should be proud of. And by knowing that more, we’d be able to create another chance of businesses.

    • Craig Jones

      Why is it good news for you to live in US? Wouldn’t you want the yen to be weaker so when you exchange US Dollars you would get more bang for your buck.

      • YoDude12

        That is exactly what is happening for him. In October of 2012, his US$1.00 only bought him ¥77.0, now it buys him ¥97.0. Of course I am assuming that he is earning money in the US, and moving it back here, rather than transferring yen to the USA to pay his expenses.

      • MP

        If the yen is weak, he has to pay more ¥ to buy $. I think that’s the direction his cash is going, so this development is good compared to the 20% drop in the yen Abenomics created

  • YoDude12

    PM Abe is trying to pump up exports on the backs of the Japanese middle class. You’ll all be paying for Toyota’s profits with higher prices for your imported Chinese clothes and wheat from the USA.
    Next, you’ll pay more taxes shortly to aide the Japanese government expansion of slush funds to pay for MPs to have conferences in Pattaya.
    The Yakuza might as well be running the country!