Yen jumps on US jobs data as Tokyo intervention risks loom

The US dollar fell towards ‌its biggest weekly loss in 12 weeks on Friday after a ⁠tepid US jobs report cooled ⁠market expectations for a near-term Federal Reserve interest rate hike, providing some relief for the embattled Japanese yen.

Broad dollar weakness lifted the ⁠euro to near a two-week high at $1.1472, up 0.6% on the week, while sterling firmed to $1.3380 for a 1.2% weekly gain, its best in nearly three months.

That also offered some respite for the Japanese yen, ‌pushing it back above 161 ⁠per dollar, but markets remained nervous about intervention risks after ​a sudden jump on Thursday lifted the currency from a 40-year low of 162.84.

The dollar took a hit after U.S. job growth slowed sharply in June and payroll gains for the prior two months were revised lower, prompting traders to pare bets on a near-term Fed rate rise.

Markets are now pricing in about a 35% chance for a hike at the September meeting, according to LSEG data, down from 55% prior to the data. U.S. Treasury yields also pulled back from earlier highs, with those on interest rate sensitive 2-year notes snapping a three-day streak of gains with a 4 basis-point drop.

"We ⁠don't have a ​hike in ​our forecast, so this was in line with ‌our views that we would get a turnaround here eventually and a weaker dollar," said Karl Steiner, ‌head of analysis at SEB. "I wouldn't be surprised if we see some more downside."

The dollar index, which ​measures the greenback against a basket of currencies including the yen and the euro, was roughly 0.3% lower at 100.68 after a 0.5% dip on Thursday. It is now down 0.7% ⁠for the week, the biggest weekly drop since early April.

 
-The Asahi Shimbun