LONDON: The dollar held firm near 13-year highs against the yen in Asia on Monday after much better-than-expected U.S. employment data bolstered expectations for an interest rate hike by the Federal Reserve before the year-end.
U.S. nonfarm payrolls jumped 280,000 last month, the largest gain since December, while payrolls for March and April also were revised to show 32,000 more jobs were created than previously reported, the U.S. Labor Department said.
“The payrolls data is making the case for a strong dollar doubly sure… The markets could even think that the Fed might raise rates even twice this year,” said Masatoshi Omata, senior manager of market trading at Resona Bank.
The dollar index moderated to 96.405 on Monday having risen as high as 96.909 after the jobs data was released on Friday, but was still above levels seen before the data was published.
The dollar’s strength was most notable against the yen, which slid out of a long-held trading range late last month. The dollar rose to a 13-year high of 125.86 yen on Friday, and last stood at 125.47 yen.
A Reuters poll conducted after the payrolls data on Friday showed Wall Street’s top banks expect the Fed to begin raising interest rates in September, followed by another before the end of the year.
