The yen fell for a third day, trading at almost 100 per dollar, as a decline in the U.S. jobless rate to a four-year low fueled optimism that growth is gathering pace and reduced demand for Japan’s currency as a haven.
The euro strengthened against the yen as data showed the region’s services and manufacturing industries shrank less in April than initially estimated. Australia’s currency slid after a report today showed retail sales shrank. The Malaysian ringgit rose to the highest in 1 1/2 years against the dollar after Prime Minister Najib Razak’s coalition was re-elected. Sweden’s krona weakened as a report showed the nation’s services industry performed worse than economists predicted.
“That at the very least is keeping dollar yen supported,” Geoffrey Yu, a senior currency strategist in London at UBS AG, said of last week’s U.S. employment report. “Risk is slightly adjusting.”
The yen slid 0.2% to 99.23 per dollar as of 9:31 a.m. New York time after touching 99.45, the weakest level since April 25. It dropped to a four-year low of 99.95 on April 11. It depreciated 0.2% to 130.04 per euro. The 17-nation currency was little changed at $1.3105.
Markets in Japan and the U.K. are closed today for a holiday.
The yen depreciated beyond 99 per dollar on May 3 for the first time in a week after a U.S. Labor Department report showed employment picked up more than forecast and the jobless rate declined to 7.5%. Payrolls expanded by 165,000 workers last month following a revised 138,000 increase in March that was larger than first estimated.
“If risk appetite on the market remains unchanged the yen will remain under pressure,” said Antje Praefcke, a senior currency strategist at Commerzbank AG in Frankfurt. The yen “has approached the 100 mark again. This was caused by the U.S. labor market data for April, which surprised on the upside.”
The world’s biggest currency dealers predict the dollar will strengthen as U.S. growth accelerates in the second half of the year. Deutsche Bank AG, Citigroup Inc., UBS AG and Barclays Plc forecast an advance of as much as 9% versus the euro by Dec. 31.