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Greenback tumbles below ¥97.40

JIJI

The dollar plunged below ¥97.40 in Tokyo trading Wednesday after sluggish Asian stock markets prompted risk-averse investors to snap up the yen as a safe-haven currency.

The euro briefly rose above ¥135 for the first time since November 2009, as disappointing U.S. employment data sent the dollar falling against the euro on speculation that the Federal Reserve will keep its quantitative monetary easing intact for a prolonged period.

At 5 p.m., the dollar was at ¥97.38-40, down from ¥98.32-32 at the same time Tuesday. The euro was at $1.3755-3756, up from $1.3677-3681, and at ¥133.95-98, down from ¥134.47-50.

The dollar came under pressure versus the yen in overseas trading overnight after the U.S. Labor Department’s closely watched employment report for September showed a smaller than expected increase of 148,000 in nonfarm payrolls from the previous month.

The outcome reinforced the view that the U.S. central bank has a very low possibility of beginning to cut its bond purchases by the end of this year, according to market sources. An official of a major foreign bank in Japan said the move is highly likely to be put off until next April.

After trading above ¥98.10 in early Tokyo trading, the dollar slumped below the ¥98 line amid the dearth of active buying from commercial players in midmorning trading.

In the afternoon, the U.S. currency lost further ground to as low as around ¥97.30, after the Nikkei stock average slumped into negative territory.

“The yen was bought broadly versus other major currencies after stocks’ falls both in Japan and abroad triggered moves to shun riskier assets,” said an official of a major foreign bank.