Dollar Slightly Lower Against Yen Ahead of U.S.Jobs Data

 
   By Hiroyuki Kachi 
 

        The dollar was a tad lower against the yen in quiet Asian trade Friday, with investors sitting on sidelines ahead of closely monitored U.S. jobs data for January later in the day.
        Around 0450 GMT, the dollar was down to Y117.34 compared with Y117.54 late Thursday in New York.
        The greenback met some selling pressure related to commercial trade settlement earlier in the Tokyo session. But investors were reluctant to take new positions ahead of the U.S. jobs data, which the Federal Reserve will examine carefully to determine whether the economy has recovered enough to go ahead with a rate increase as early as in the middle of the year.
        "The dollar-buying is unlikely to persist, even assuming a good reading" of the jobs data, said Minori Uchida, head of Tokyo global markets research at the Bank of Tokyo-Mitsubishi UFJ.
        Mr. Uchida said investors are concerned about a downside bias in the U.S. economy, especially given recent weak data, leading to heightened caution toward U.S. retail sales data scheduled for next week.
        Investors have already raised the hurdle for the jobs data, taking into greater account not only non-farm payrolls and unemployment, but wages as well. "It is unlikely that all the readings will show green lights for dollar-buying," Mr. Uchida said.
        He said a downbeat reading for the jobs data would stoke worries about the health of the U.S. economy and put downward pressure on the dollar. But diminished risk aversion in tandem with a pickup in oil prices and the U.S. stock market may limit the dollar's downside, he added, suggesting there could be a considerable number of investors with appetite for dollars at the lower half of the Y116-level.
        The quick ups and downs of the Australian dollar were especially noteworthy amid the overall lack of volatility in the currency market.
        The Australian dollar temporarily hit as high as Y92.26 in midmorning before stabilizing at Y91.86. That compares with Y91.90 in New York. The Aussie was also at $0.7829 after going as high as $0.7859.
        The Reserve Bank of Australia lowered both its medium-term forecasts for inflation and for economic growth Friday, but offered no clear hints that interest rates would be cut further. The central bank lowered rates by one quarter of a percentage point Tuesday to a record low 2.25%, its first cut since August 2013.
        IG Securities market analyst Junichi Ishikawa said the RBA's mid-term outlook was within expectations. Rather, the Australian currency remained susceptible to upward movement, with investors covering short positions while watching for a pickup in oil prices.
        Among other currency pairs, the euro was at $1.1469 from $1.1485 and at Y134.59 from Y134.98.
        The WSJ Dollar Index, a measure of the dollar against a basket of major currencies, was down 0.04% at 84.92.
        Write to Hiroyuki Kachi at Hiroyuki.Kachi@wsj.com
        (END) Dow Jones Newswires

        February 06, 2015 00:28 ET (05:28 GMT)

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