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08/08/24
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JPY Falls Versus Dollar After US Jobless Claims Decline More Than Expected
On Thursday, the yen dropped versus the dollar after U.S. labor market data showed that last week, unemployment benefits declined more than expected, cooling fears of a recession being imminent.
The yen’s decline came after a sharp fall the prior day in a volatile week during which investors have had to evaluate the unwinding of carry trades and how Japanese monetary policy may change.
On Thursday, the Labor Department said first-time jobless claims dropped to a seasonally adjusted 233K for the week that ended on August 3, indicating that fears that the labor market was unraveling were exaggerated.
The yen was 0.46% lower at 147.340, after on Wednesday sliding 1.6% after Shinichi Uchida, the Bank of Japan’s Deputy Governor, played down the probability of a short-term interest rate hike that would normally boost the currency.
The sharp yen moves pushed the dollar index up to 103.38, higher than the 7-month low of 102.15 hit on Monday.
The yen began this week by scaling the 7-month high of 141.675 per dollar, very far from the 38-year lows where it was in early July, after last week’s weak U.S. jobs data fueled recession worries and spooked investors.
Last week’s unexpected rate hike by the BOJ also forced investors to move out of carry trades.
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