Yen Retreats from Four-Week High Ahead of US Jobs Report
The Japanese yen retreated from its four-week high against the US dollar on Friday in Asian trading, as investors took profit and corrected their positions ahead of the monthly US jobs report. Despite the decline, the yen is still set to post a strong weekly gain, thanks to hawkish comments from some Bank of Japan officials that have pushed expectations for a September interest rate hike to near full pricing.
The dollar rose 0.4% against the yen to ¥156.44, from an opening level of ¥155.80, after recording a low of ¥155.29, the lowest level since August 3. This marks the second consecutive daily gain for the yen against the dollar, supported by the Bank of Japan's hawkish stance and a decline in the 10-year US Treasury yield.
Market pricing for the probability of the Bank of Japan raising interest rates by 25 basis points at its September meeting increased from 85% to 98% following comments from officials. Investors are awaiting further data on inflation, unemployment, and wages in Japan to reassess those expectations.