Dollar rises to mid-124 yen range in Tokyo on U.S. rate hike hopes

Tokyo, August 10, AZERTAC

The U.S. dollar rose to the mid-124 yen range Monday in Tokyo after the closely watched U.S. jobs data released Friday helped support the view that a U.S. rate hike will be coming as early as September, according to KYODO.

At 5 p.m., the dollar fetched 124.50-52 yen compared with 124.15-25 yen in New York and 124.78-80 yen in Tokyo at 5 p.m. Friday. It moved between 124.23 yen and 124.51 yen during the day, changing hands most frequently at 124.40 yen.

The euro was quoted at $1.0959-0960 and 136.44-48 yen against $1.0960-0970 and 136.14-24 yen in New York and $1.0939-0941 and 136.50-54 yen in Tokyo late Friday afternoon.

In Tokyo, the dollar drew buying on renewed hopes of a U.S. rate hike and recouped losses seen in New York on Friday, where the unit briefly hit a two-month high of 125.07 yen immediately after the release of the July jobs data but then retreated amid declines in U.S. long-term rates.

"Although the U.S. jobs data was largely within expectations, its content was not bad enough to dismiss views about a U.S. rate hike, prompting buying of the dollar in the lower 124 yen zone," Yuzo Sakai, manager of foreign exchange business promotion at Tokyo Forex & Ueda Harlow.

The U.S. jobs report showed that nonfarm jobs topped the 200,000 threshold, indicative of economic recovery, for the third consecutive month in July and also revised upward the figures for nonfarm jobs generated in June and May.

Gains in Chinese shares also lifted risk appetite and drove traders to sell the yen, deemed a relatively safe asset, against the dollar, dealers said.

Shinichiro Kadota, foreign exchange strategist at Barclays Bank, said, "With the big event (of the jobs report) over, the market will again continue to watch closely for clues to the timing of a rate hike, such as Fed members' comments or economic indicators."

A speech later Monday by Federal Reserve Bank of Atlanta President Dennis Lockhart, who serves as a voting member of the Fed`s policy making committee this year, will be closely watched. His comments in support of a rate hike in September earlier this month were taken as a cue to buy the dollar.

"The hawkish remarks by Lockhart, who was largely perceived as neutral or dovish, came as a surprise to the market earlier, so the market may react again if he says something in his speech," Tokyo Forex & Ueda Harlow's Sakai said.

The euro, meanwhile, rose against the yen in tandem with the dollar-yen pair while moving narrowly against the dollar.

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