AFP, Hong Kong :
The dollar struggled to recover sharp losses in Asia Monday after last week’s disappointing US jobs report reduced the chances of an interest rate hike, while the stronger yen sent Japan’s Nikkei tumbling.
The US labour department said Friday that May saw the world’s top economy create the fewest number of jobs in six years, slashing expectations borrowing costs will rise any time soon.
The news caught off-guard traders who had been expecting the Fed to announce a rise no later than July, with the central bank itself having hinted as such just last month.
The dollar was sent plunging two percent against both the yen and the euro and it was unable to break out in early exchanges Monday.
The greenback bought 106.73 yen from 106.63 yen in New York but it is still sharply down from levels above 109 yen before the report. The euro dipped to $1.1348 from $1.1364 but was also well up from the $1.1154 reached Thursday.
“The case for a rate hike at this stage remains weak,” Matthew Sherwood, head of investment strategy at Perpetual in Sydney, said in an e-mail to clients.
“Even if there are some signs of improving activity it has to be weighed up against the risk of tightening policy too early given that there is little in the toolbox to use should such a move prove to be a policy mistake which triggers an economic downturn.”
The yen’s rise hit Japan’s exporters, sending the Nikkei falling 1.1 percent by the break.
Worries over the state of the world’s number-one economy-as well as profit taking after last week’s gains-also weighed on Hong Kong, which was off 0.3 percent. Shanghai was marginally lower and Taipei fell 0.4 percent, but Sydney was 0.7 percent higher.
However, the dollar rallied against the British pound after opinion polls at the weekend showed more people saying they will vote to leave the European Union at this month’s referendum.
Surveys by the Guardian, its sister paper the Observer, and ITV all had the leave camp picking up momentum ahead of the June 23 poll. The pound was at $1.4389 from $1.4515 Friday in New York.
The dollar struggled to recover sharp losses in Asia Monday after last week’s disappointing US jobs report reduced the chances of an interest rate hike, while the stronger yen sent Japan’s Nikkei tumbling.
The US labour department said Friday that May saw the world’s top economy create the fewest number of jobs in six years, slashing expectations borrowing costs will rise any time soon.
The news caught off-guard traders who had been expecting the Fed to announce a rise no later than July, with the central bank itself having hinted as such just last month.
The dollar was sent plunging two percent against both the yen and the euro and it was unable to break out in early exchanges Monday.
The greenback bought 106.73 yen from 106.63 yen in New York but it is still sharply down from levels above 109 yen before the report. The euro dipped to $1.1348 from $1.1364 but was also well up from the $1.1154 reached Thursday.
“The case for a rate hike at this stage remains weak,” Matthew Sherwood, head of investment strategy at Perpetual in Sydney, said in an e-mail to clients.
“Even if there are some signs of improving activity it has to be weighed up against the risk of tightening policy too early given that there is little in the toolbox to use should such a move prove to be a policy mistake which triggers an economic downturn.”
The yen’s rise hit Japan’s exporters, sending the Nikkei falling 1.1 percent by the break.
Worries over the state of the world’s number-one economy-as well as profit taking after last week’s gains-also weighed on Hong Kong, which was off 0.3 percent. Shanghai was marginally lower and Taipei fell 0.4 percent, but Sydney was 0.7 percent higher.
However, the dollar rallied against the British pound after opinion polls at the weekend showed more people saying they will vote to leave the European Union at this month’s referendum.
Surveys by the Guardian, its sister paper the Observer, and ITV all had the leave camp picking up momentum ahead of the June 23 poll. The pound was at $1.4389 from $1.4515 Friday in New York.
