Yen Soars as Weaker US Jobs Data Spurs Dollar Sell-Off
The Japanese yen strengthened significantly against the US dollar on Friday, July 8, following weaker-than-expected US employment data. According to Reuters, traders are wary of potential market intervention after Japan and the US jointly intervened days earlier to prop up the yen.
The US dollar briefly fell by 1.1% to 156.68 yen before rebounding slightly to 157.16 yen. This level is still far from the 40-year high of 163.99 yen reached in July, but it represents a notable shift in market sentiment.
Analysts attribute the dollar's weakness to the sharp decline in payrolls, which fell by 23,000 last month after a downwardly revised increase of 20,000 in June. Economists had previously expected an increase of 80,000 jobs.
Lee Hardman, Senior Currency Analyst at MUFG, notes that 'the magnitude of the decline in payrolls makes the dollar's weakening understandable.' He attributes the currency's movement to fundamental factors, specifically the sharp drop in two-year US Treasury yields.