LONDON: The dollar sank against the yen on Friday as the safe-haven Japanese currency gathered bids after Tokyo shares fell to a seven-month low in nervous trading ahead of U.S. jobs data due later in the day.
The greenback was down 0.7 percent to 119.22 yen. The U.S currency was on track for a 2 percent loss this week, during which it has been pummelled by bouts of global risk aversion that favoured the yen and euro.
The dollar index lost 0.2 percent to 96.241.
The yen also surged against the euro, which came under broad pressure after the European Central Bank gave a sobering assessment of the euro zone economy and suggested it may have to beef up its already massive stimulus programme.
The euro was down 0.6 percent at 132.73 yen after skidding to a four-month low of 132.62.
For the coming August U.S. non-farm payrolls, the market consensus is for an increase of 220,000 jobs.
“Any boost for the dollar from a solid jobs report could be limited as the recent financial market turmoil has strengthened expectations that the Fed will delay hiking rates,” said Masafumi Yamamoto, a senior strategist at Monex in Tokyo.
“And if the jobs report is very strong and does raise prospects of a September hike, that could be perceived as negative for the global markets amid fears of slowing Chinese growth and spark off risk aversion. The dollar could even end up being sold against the yen.”
The euro initially slid against the dollar, reaching $1.1087 from levels above $1.1200, but then strengthened 0.1 percent to $1.1135. It was on course for a 0.5 percent weekly loss.
