Dollar Surges as US Hiring Blows Past Forecasts

The US dollar rebounded sharply on Friday after the release of strong August nonfarm payrolls data, which showed employers added 162,000 jobs, well above the expected 56,000. The unemployment rate held steady at 4.1 percent. This unexpected growth in hiring reversed July's contraction of 23,000 and sent the dollar index up 0.37 percent to 99.33.

The yen weakened 0.41 percent to 156.45 per dollar, pulling back from a month-long high of 155.25. However, it remains on track for a weekly gain of more than 2 percent, driven by expectations the Bank of Japan may adopt a more hawkish stance at its September 17-18 meeting.

Japan's top currency diplomat Atsushi Mimura said he remained alert to exchange-rate moves and in contact with US authorities, keeping intervention risk alive. Traders had pared bets on a September Fed rate hike to roughly 50 percent after dovish comments from Governor Christopher Waller, but the strong jobs data may shift that calculus.