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TOKYO: The dollar edged up against the yen in Asian trade Friday as
traders waited for a key US jobs report for fresh leads on the
chances of further Federal Reserve interest rate cuts, dealers said.
The dollar gained to 104.62 yen in Tokyo
afternoon trade from 104.53 in New York late on Thursday.
The euro was steady at 1.5469 dollars against
1.5462, hovering close to a one-month low. The euro was little
changed at 161.79 yen after 161.61.
Traders were waiting for a US labor market
report due later Friday “that may confirm that the economy is
still in bad shape,” said Tomoko Fujii, head of economic strategy
at Bank of America in Tokyo.
“The unemployment data will set the tone for
the dollar this month. Once we have this figure, the economic
picture will be clearer,” she said.
The dollar was supported by US consumption and
manufacturing data released Thursday that eased worries over the
health of the world’s largest economy and fueled speculation that
the Fed may pause in its series of interest rate cuts.
The Institute of Supply Management index of US
manufacturing activity held steady at 48.6 in April. While the
reading was below the 50-level, signaling continued contraction in
the sector, it beat forecasts for a decline to 48.0.
A separate report showed that personal
consumption picked up slightly.
The figures “supported perceptions that the
Fed is not likely to cut interest rates again,” NAB Capital
Strategist John Kyriakopoulos wrote in a note to clients.
The dollar has gained ground recently in
anticipation of a pause in the Fed’s aggressive cycle of interest
rate cuts.
The Fed announced a quarter-point reduction on
Wednesday and some analysts said it could be the last reduction for
some time.
Others, however, were more pessimistic, arguing
that improving market optimism over the economy was unrealistic.
“Market participants refuse to accept the fact
that [the credit crisis] is having a negative impact on the actual
economy and the non-financial sector,” said Daisuke Uno, chief
strategist at Sumitomo Mitsui Banking Corp.
“They are evading reality,” he added.
The Labor Department said Thursday that jobless
claims soared 35,000 to 380,000 last week.
But unless the non-farm payrolls report shows an
unexpectedly severe drop in employment, traders will continue to bet
on an end to Fed rate cuts, supporting the dollar, predicted
Kyriakopoulos.
Against regional currencies, the dollar rose to
1.3628 Singapore dollars in late Asian trade from 1.3578 a day
earlier, to 1,010.05 South Korean won from 1,002.50 and to 30.464
Taiwan dollars from 30.448.
The greenback also firmed to 31.67 Thai baht
from 31.66, to 9,236 Indonesian rupiah from 9,222 and to 42.298
Philippine pesos from 42.235.
-- AFP
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