The
dollar traded 0.2 percent from the highest level in 3 1/2 years versus the yen
on speculation an improving labor market will compel the Federal Reserve to
slow stimulus even as Japan pledges to extend easing policies.
Demand
for the dollar against Japan’s currency was supported before a report forecast
to show U.S. employers added more jobs in February. The yen is set to decline
this week against its 16 major peers as data showed Japan had a current account
deficit for a third-straight month, damping the currency’s value as a haven.
The Australian and New Zealand dollars are poised to gain versus the yen this
week as optimism about global growth spurred purchases of higher-yielding
assets.
“The
greater the momentum in the U.S. economy, the sooner the Fed will taper off QE
and the higher the U.S. yields will rise,” said Sean Callow, a senior currency
strategist at Westpac Banking Corp. (WBC) in Sydney, referring to the Fed’s
asset purchase program known as quantitative easing. “Dollar-yen is a preferred
tool for dollar bulls at the moment.”
The
dollar rose 0.1 percent to 94.94 yen as of 10:37 a.m. in Tokyo from yesterday,
when it reached 95.09, the most since August 2009. It was little changed at
$1.3099 per euro. The euro climbed 0.1 percent to 124.36 yen.
The
yen has dropped 1.4 percent against the dollar since March 1, falling for a
second week, and weakened 2 percent against the euro. The euro advanced 0.6
percent versus the greenback, its first weekly gain since Feb. 1.
Economists
in a Bloomberg News survey estimate the Labor Department will say today that
U.S. payrolls expanded by 165,000 in February after a 157,000 gain the prior
month, while the jobless rate likely held at 7.9 percent.
(Source: Bloomberg)
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