Following an overnight plunge below ¥117 on another series of weak U.S. economic indicators, the dollar hovered beneath the threshold in Tokyo trading on Friday as a wait-and-see mood strengthened ahead of the release of U.S. jobs data for January.
At 5 p.m., the dollar stood at ¥116.81-81, down sharply from ¥117.95-95 at the same time Thursday. The euro was at $1.1194-1194, up from $1.1079-1081, and at ¥130.76-77, slightly up from ¥130.69-70.
The greenback dived as low as around ¥116.50 in New York trading overnight on selling prompted by a rise in U.S. jobless claims last week and a fall in manufacturing orders in December, traders said.
In Tokyo, the U.S. currency was briefly buoyed to levels close to ¥117 by routine purchases from Japanese importers, but its topside was capped by hefty losses of Tokyo stock prices.
“Sentiment toward the dollar is becoming bearish,” said an official at a foreign exchange brokerage house, pointing to the prevailing view that the U.S. Federal Reserve will skip an additional interest rate hike at its next policy-setting meeting in March.
The U.S. government is scheduled to release its closely watched employment report later on Friday.
“Caution is needed about the dollar’s reaction to any weak readings in the jobs data,” an official at a currency margin trading service provider said.
Meanwhile, an official at a major securities firm said, “Even if the employment situation is confirmed to be good, the dollar is likely to remain under selling pressure versus the yen,” following recent sluggish U.S. data.