The dollar fell to levels slightly above ¥103 in Tokyo Monday, as stock markets in and outside Japan skidded after the announcement of U.S. jobs data on Friday.
At 5 p.m., the dollar was quoted at ¥103.11-12, down from ¥103.¥90-90 at the same time on Friday. The euro stood at $1.3717-3718, up from $1.3699-3700, and at ¥141.45-47, down from ¥142.33-36.
The greenback approached ¥103.00 in the afternoon. But in late trading, the U.S. currency cut some losses.
Stock markets in Tokyo and overseas dropped as speculation of an early U.S interest rate hike receded after the U.S. Labor Department reported Friday that the country’s nonfarm payrolls increased 192,000 in March, traders said.
The jobs increase, almost in line with the market consensus of around 200,000, “was not bad,” a major Japanese bank official said.
But investors were in a growing mood for anticipating a larger increase and as a result, the markets reacted negatively to the annoucement, market sources said.
“Stronger-than-expected profit-taking in the Tokyo stock market added fuel to dollar selling,” a different Japanese bank official said.
An official at a foreign exchange margin trading service firm said stock selling and yen buying in Tokyo may have been intensified by a remark by Takahiro Mitani, president of Japan’s Government Pension Investment Fund. The fund will review its basic portfolio in a manner that would not affect financial market developments, Mitani said. The comment came amid some players expecting the fund’s increased investments in such riskier assets as stocks and foreign bonds.
Many players are now waiting for the announcement of the Bank of Japan’s policy decision on Tuesday, a currency market broker said, noting that there is no other major market-moving factor near at hand.
On Monday, the dollar drew repurchases at levels near ¥103. But it may be prone to falling on adjustment selling for the time being on speculation about an early U.S. interest rate rise, a bank official said.