FOREX-Yen gets some relief as dollar pulls back after private payrolls report

(Refiles to add “FOREX” headline tag)

By Brigid Riley

TOKYO, Oct 5 (Reuters) – The yen received some much needed relief on Thursday as the dollar settled back and U.S. Treasury yields moderated after mixed U.S. economic data overnight made investors reduce bets on the Federal Reserve raising interest rates again this year.

The dollar index, which tracks the greenback against six peers, held near overnight levels at 106.53.

The greenback gave up some recent gains after U.S. private payrolls increased far less than expected in September, according to the ADP National Employment Report on Wednesday, although analysts said more evidence was needed to be sure how fast the labour market is cooling.

Longer dated U.S. Treasury yields eased from 16-year highs after the data and remained lower in the Asian morning.

“There are some indications that the U.S. labour market is cooling down further” but it’s still too early to tell, said Moh Siong Sim, currency strategist at Bank of Singapore, putting Friday’s non-farm payrolls under close watch.

“The bigger picture is that the overall U.S. growth has been slowing but it’s been slowing slower than expected.”

Dollar/yen, which tends to be sensitive to U.S. yields, last traded around 148.43, down almost 0.5% from late U.S. levels, pushing the yen further off this week’s low of 150.165, its weakest since October 2022.

Questions about possible intervention by Japanese authorities sparked after

The yen’s sharp recovery after breaching the 150-line on Tuesday had sparked speculation that Japanese authorities had intervened to support the currency, but Bank of Japan money market data showed on Wednesday Japan most likely had not intervened.

Finance Minister Shunichi Suzuki on Wednesday declined to comment on whether Tokyo had stepped in, and repeated that currency rates must move stably reflecting fundamentals.

Besides the lower U.S. Treasury yields, the yen also drew support from an overnight drop in oil prices, said Kyle Rodda, markets analyst at Capital.com, though he added that it was likely to be a “short-term reprieve.”

Story continues

Already in the Asian morning, oil prices inched up in early trade, clawing back some of the previous session’s big losses.

Elsewhere, the euro was up 0.18% so far in Asia at $1.0524 , keeping above this week’s fresh low of $1.0448.

In a Reuters poll, the median view among 20 analysts on how low the euro will go this month was $1.04, with only one respondent saying the currency would touch parity.

Sterling traded at $1.2139, steadying from Wednesday’s low of $1.20385 per dollar.

The Australian dollar fetched $0.6361, up over 0.5% in early trade, while the kiwi similarly ticked up 0.5% to $0.5943 against the greenback.

(Reporting by Brigid Riley. Editing by Gerry Doyle & Simon Cameron-Moore)