TOKYO: The dollar rebounded against the yen in Asian trade on Friday after tumbling from a six-year high, as investors await the release of a key US jobs report later in the day.
In Tokyo the greenback changed hands at 108.98 yen, up from 108.42 yen.
However, it is well off the levels above 110 yen it touched in Asia Wednesday before succumbing to profit-taking and disappointing US data.
The euro was at $1.2643 and 137.80 yen against $1.2667 and 137.34 yen in US trade after the European Central Bank Thursday held off further rate cuts, but said they were committed to taking steps to combat deflation.
“Tonight’s US payrolls data will be important; a strong labour report could push the dollar back up,” Yutaka Miura, senior technical analyst at Mizuho Securities told Dow Jones Newswires.
But traders were cautious with various concerns hitting sentiment, including the Federal Reserve’s plans to exit its stimulus and raise interest rates, the first US Ebola virus outbreak and unrest in Hong Kong.
“A sense of risk-off tone still prevails as markets continue to be buffeted by a combination of factors, including the ever-closer Fed normalization, growth worries particularly regarding the eurozone and China, as well as geopolitical risks,” Credit Agricole said in a note.
Pro-democracy activists in Hong Kong scuffled with police outside government headquarters Friday despite an eleventh-hour agreement for talks, as China said the demonstrators were “doomed to fail.”
The campaign for full universal suffrage has led to the closure of some of the city’s busiest thoroughfares and comes during the Chinese Golden Week holiday when cashed-up mainlanders usually visit its numerous shopping outlets.
National Australia Bank said investors were nervous about the possible resignation of the city’s top politician Leung Chun-ying.
“The apparent fear was that if Leung announced his resignation, as demanded by…protestors, he would be replaced by an even more pro-Chinese premier and that the protests could escalate rapidly,” it said.
The euro was lower against the dollar after rallying in response to the ECB policy meeting on Thursday.
Bank chief Mario Draghi announced various programs to inject cash into the single currency bloc’s moribund economy.
The dollar was mixed against other Asia-Pacific currencies.
It rose to Sg$1.2731 from Sg$1.2706 on Thursday, to 32.45 Thai baht from 32.40 baht, and to 1,061.68 South Korean won from 1,058.93 won.
It weakened to 12,146.00 Indonesian rupiah from 12,165.00 rupiah and was flat at 44.74 Philippine pesos, Tw$30.41, and 61.61 Indian rupees.
The Australian dollar fell to 87.93 US cents from 88.08 cents, while the Chinese yuan bought 17.73 yen against 17.70 yen.