Yen shows little reaction to Bank of Japan decision to stay on hold
By V. Phani Kumar and Polya Lesova, MarketWatch
NEW YORK (MarketWatch) — The dollar pulled back against most other currencies Friday as an upbeat nonfarm-payrolls report for September belied fears of sluggish rate of growth in employment and encouraged investors to move back into riskier assets.
The dollar index DXY -0.42% , which tracks the performance of the greenback against a basket of other major currencies, slipped to 78.254, down from 78.586 ahead of the data and from 78.611 late Thursday.
The euro EURUSD +0.23% climbed to 1.3489, compared with $1.3434 in North American trading late Thursday.
“In the big picture, today’s reading soothes recessionary fears,” Andrew Wilkinson, chief economic strategist at Miller Tabak & Co., wrote in a note after the data release, calling the print on the monthly job additions a “bumper” reading.
Data released by the Labor Department showed employment grew by 103,000 workers in September, trumping expectations for a modest increase of about 59,000 jobs in a MarketWatch survey. The unemployment rate held remain steady at 9.1%.
Expectations had been muted after an initial reading for August showed the U.S. failed to add any jobs during that month. August and July employment figures were revised higher as well. Read full story on the employment report.
“The recent financial market turmoil has spurred fears that the economy is heading for recession if it already isn’t in one. Yet although demand has softened in certain areas while inventories have risen, in the big picture the economy has not had a net employment loss since September 2010 — a trend that continued in the September report,” Wilkinson wrote in emailed comments.
In other foreign-exchange trading, the British pound GBPUSD +0.79% rose to $1.5565 from $1.5438 late Thursday. The pound had fallen sharply in the previous session after the Bank of England announced a new round of quantitative easing aimed to boosting the sluggish U.K. recovery.
The U.S. dollar USDJPY +0.07% , however, strengthened to 76.81 Japanese yen, compared with 76.63 yen Thursday. The Japanese unit is also perceived to be a safe haven and tends to weaken when investors’ appetite for risk improves.
The Japanese unit had earlier in the day shown little reaction to the Bank of Japan’s decision to keep monetary policy on hold. Read more about the decision.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
Polya Lesova is chief of MarketWatch’s London bureau.
