The dollar retook ¥98 in Tokyo trading Monday, as higher stock prices in and outside Japan encouraged dollar buying.
At 5 p.m., the dollar was quoted at ¥98.05-08, up from ¥97.90-91 at the same time on Friday. The euro stood at $1.3673-3675, down from $1.3680-3682, and at ¥134.07-10, up from ¥133.94-97.
On Monday, Japan’s key stock market gauges climbed to their highest levels in nearly a month while other equity markets in Asia also generally fared well.
The stock market developments “prompted yen sales in cross trading, which in turn helped push up the dollar versus the yen,” said a currency market broker.
Also behind the dollar’s strength was a bigger-than-expected Japanese trade deficit for September, announced in the morning.
The Finance Ministry said Japan’s customs-cleared trade deficit totaled ¥932 billion, even bigger than a median forecast of a ¥920 billion deficit among 23 research institutes surveyed by Jiji Press.
Overall dollar-yen trading was range-bound throughout Monday, ahead of the U.S. Labor Department’s announcement of jobs data for September on Tuesday that was delayed by the government shutdown, traders said.
A market consensus is for a U.S. nonfarm payroll increase of some 180,000, with the unemployment rate seen at 7.3 percent.
Few currency players are willing to take big positions in case the results deviate significantly from market forecasts, traders said.
But the upcoming data are too old now and they cover a period ahead of the 16-day shutdown to Wednesday, an economist said, predicting that players are unlikely to react very much to the belated data.
Market participants are interested in how much negative effects the government shutdown has had on the U.S. economy, as well as in the course of U.S. monetary policy, said an official of a foreign exchange margin trading service firm.
Speculation is mounting that an expected reduction in the Federal Reserve’s bond purchases is seen starting later than the previously anticipated timing of December, market sources said.