By Saumya Vaishampayan and Carla Mozee, MarketWatch
NEW YORK (MarketWatch) — The Japanese yen extended its slide Friday, a day after the U.S. dollar a which spiked above the key psychological 100-yen level for the first time in four years.
The dollar USDJPY +0.9880% bought ¥101.61 in recent trade, up from late Thursday’s level of ¥100.48. It crossed ¥101.50, another key level, on Friday in early North American trade. The dollar managed to break above the ¥100 threshold with help from Thursday’s release of weekly U.S. jobless data, which came in better than anticipated.
The dollar’s climb toward the ¥100 mark had accelerated after Japan’s central bank in early April unveiled a massive stimulus program, but greenback kept running into resistance in its tests of the triple-digit mark until Thursday. Read more in Forex Files about the dollar's break above ¥100 .
“Should non-Japanese short-term investors, who have recently shrunk JPY shorts, restart to sell JPY, there would be little obstacles for the Japanese currency to depreciate further,” Citi’s Osamu Takashima wrote in a research note Friday. Shorting a currency is a bet that it will fall.
The dollar’s breakthrough came after the U.S. Labor Department said jobless claims for the week ended May 4 fell by 4,000 to 323,000, the lowest level since January 2008. Economists expected claims to rise to 335,000, according to a MarketWatch survey.
The claims figures followed last week’s report that the U.S. economy added 165,000 jobs in April, and that the unemployment rate slipped to 7.5% from 7.6%. Economists polled by MarketWatch had expected 135,000 new jobs and the jobless rate to stay at 7.6%.
The monthly jobs report holds “encouraging signs that the U.S. economy is continuing to recover from the deep 2008-2009 recession,” Wells Fargo Advisors chief macro strategist Gary Thayer wrote Thursday. “The unemployment rate is still high but it is moving in a good direction, consistent with moderate economic growth.”
The drop in the yen spurred sharp gains in shares of Japanese exporters Friday, resulting in a climb in the Nikkei Stock Average JP:NIK +2.93% .
The dollar has risen about 7% against the yen since the Bank of Japan on April 4 outlined its two-year monetary-easing campaign aimed at ridding the economy from long-running deflation.
The dollar’s strength was also on display in its pairing with the Australian dollar AUDUSD -0.80% , which fell closer to parity. On Friday, the Aussie bought $1.0023, after having jumped to $1.02 Thursday after Australia reported a higher-than-expected number of new jobs in April.
The Aussie was little changed Friday after the Reserve Bank of Australia cut its 2013 inflation forecast, seeing the level at about 2.25% compared with its previous view of 2.5%.
In a statement about monetary policy, the RBA also said it expects economic growth to be a little below trend over the rest of this year, before picking up pace through 2014.
Earlier this week, the RBA cut its key interest rate by a quarter-percentage point to a record low 2.75%, citing slow economic growth and below-trend inflation among the reasons for the move.
The euro EURUSD -0.35% traded at $1.3005, little changed from $1.3038 late Thursday. The British pound GBPUSD -0.38% was $1.5407 against the greenback Friday compared with late Thursday’s level of $1.5442.
The ICE dollar index DXY +0.46% , which measures the U.S. dollar’s moves against six other major currencies, rose to 82.977 from 82.687.
The WSJ Dollar Index XX:BUXX -0.01% , an alternative gauge of the greenback’s moves against a slightly wider basket, was 74.56 compared to 74.27.
