October 6, 2014
TOKYO (AFP) - The dollar held steady in Asia Monday after surging on strong US jobs data that fanned expectations the Federal Reserve will hike interest rates sooner that later.
In Tokyo midday trading, the greenback fetched 109.65 yen, against 109.75 yen in New York but sharply up from 108.98 yen in Tokyo earlier Friday.
The euro was sitting around two-year lows of $1.2516 against $1.2514 in US trade, while it bought 137.24 yen compared with 137.33 yen.
On Friday the Labor Department said the world's biggest economy created 248,000 jobs in September and the jobless rate dipped to a six-year low of 5.9 percent.
The report is latest indicator that the economy is on track to recovery and will add to pressure on the Fed to increase rates before its mid-2015 timetable to avoid bubbles forming.
By contrast, European Central Bank chief Mario Draghi expressed concern about more weakness in the eurozone on Thursday, as the ECB prepares to easing measures to fend off deflation.
"This ECB policy profile stands in stark contrast to the Fed where Friday's payrolls report push the Fed profile towards earlier tightening," Credit Agricole said in a note.
Speculation is mounting about when the Bank of Japan will expand its own asset-buying growth programme after a second-quarter contraction in the economy and a string of other weak data.
BoJ policymakers kicked off a two-day meeting on Monday, but few observers expect any further action until its October 31 meeting at the earliest.
"Speculation of another round of BoJ (monetary easing) remains fuelled by recent fragile corporate sentiment, soft production, declining inflation," Credit Agricole said.
"Even so, our economists remain firm in their view that the BoJ will not act unless a significant fall in equity markets ensues," it added.
