By V. Phani Kumar, MarketWatch
HONG KONG (MarketWatch) — The U.S. dollar bounced back during Asian hours Monday, recovering losses suffered after Friday’s disappointing jobs report, as a sell-off in commodity and Asian equity markets pushed investors toward the currency’s safe-haven appeal.
The dollar’s gain included a rebound against the Japanese yen, with the greenback returning above the ¥78 level — despite heightened investor risk-aversion and steep losses for Japanese equities — amid caution Tokyo may intervene against the yen’s appreciation.
The dollar USDJPY +0.12% fetched ¥78.168 early Monday afternoon in Tokyo after briefly trading below the ¥78 mark earlier in the day.
On Friday, the dollar had dropped to a low of ¥77.63 after the downbeat May non-farm payrolls data, but quickly jumped to ¥78.68. Some analysts suspected those moves were because of intervention conducted by the Bank of Japan, although Japanese authorities hadn’t confirmed such a move. Read Friday’s Currencies report.
On Monday, Japanese Finance Minister Jun Azumi declined to comment on possible foreign-exchange intervention, according to a Kyodo news report.
Japan’s benchmark Nikkei Stock Average JP:100000018 -1.71% was down 2% by the midday break on Monday, while the broader Topix JP:I0000 -1.89% slumped 2.1% after earlier touching its lowest point since at least 1985. Read Asia Markets.
The yen, which like the dollar and the Swiss franc is also widely considered to be a safe-haven currency, generally tends to rise during periods of market volatility.
But Japanese officials, worried about the impact of a rising local currency on the country’s economy and exporters, have often warned they would act to suppress the currency’s ascent.
During Asian hours on Friday, for example, Finance Minister Azumi and Vice Finance Minister Takehiro Nakao had each warned of intervening in the markets if the yen rose amid volatility. Read full report on Friday’s warning about intervention.
Meanwhile, the ICE dollar index DXY +0.16% , which measures the greenback’s performance against a basket of six other major currencies, including the yen, climbed to 82.980 from 82.878.
The recovery followed a steep fall for the dollar Friday, after official data showed the U.S. added just 69,000 jobs in May, far below expectations. Read the payrolls report.
Among the other major currency pairs, the euro EURUSD -0.11% fell to $1.2399 from $1.2422.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
