US dollar under pressure

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Graphic: renjith krishnan

Tokyo - The dollar faced downward pressure in Asia on Monday as investors bet the Federal Reserve will not speed up the pace of tapering of its stimulus programme after last week's US jobs report matched forecasts.

The greenback fetched 103.25 yen in Tokyo midday trade, compared with 103.26 yen late in New York but well below the 103.88 yen in Tokyo earlier Friday before the jobs data was released.

The euro was at 141.48 yen, from 141.50 yen in New York on Friday and 142.36 yen on Friday in Tokyo.

Against the dollar, the euro traded at $1.3700, slightly down from $1.3704 in US trade.

The Labor Department said the world's number one economy added 192,000 jobs in March - just below forecasts of 195,000 - while the unemployment rate held steady at 6.7 percent.

Analysts had predicted the dollar would rally if the report showed more than 225,000 jobs added but would retreat if the figure came in below 150,000.

While the figures were an improvement in the previous three months - which were hit by a severe winter - they suggested the jobs sector is still not strong enough for the Fed to speed up tapering of its monetary easing campaign. A quicker wind-down would tend to boost the dollar.

The report also showed average hourly earnings rose by 2.1

percent year-on-year, slower than an increase of 2.2 percent in February and expectations of 2.3 percent, National Australia Bank said.

“This keeps (Fed chair) Janet Yellen with the whip hand in arguing that there remains plenty of slack in the labour market,” it added.

In Tokyo, the Bank of Japan starts a two-day policy meeting on Monday.

Most analysts expect it hold off further easing measures as it gauges the impact of an April sales tax hike - Japan's first in 17 years - on the country's budding economic recovery.

(Dow Jones Newswires contributed to this article.) - Sapa-AFP


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