* Soft U.S. non-farm figures weigh on dollar
* Yen sell-off continues, pressured by BoJ stimulus
* Dollar on track to rise toward 100-yen mark
By Gertrude Chavez-Dreyfuss and Daniel Bases
NEW YORK, April 5 The U.S. dollar weakened
against most major currencies on Friday, dropping to a two-week
low against the euro, as worse-than-expected jobs data raised
concerns that the pace of recovery in the American labor market
The yen extended its downward slide, hitting a fresh
3-1/2-year nadir against the dollar and a near two-month trough
against the euro. As trading volumes dried up heading into the
weekend, the euro was up more than 2 percent on the Japanese
Investors continued to dump the yen in the aftermath of the
Bank of Japan's massive stimulus announcement on Thursday, which
should keep its downward trend intact.
The yen, down 3.5 percent this week against the dollar, was
on track for its worst week since December 2009. Against the
euro, the yen was on pace for its largest weekly loss since
November 2008, down about 5 percent.
But the weak U.S. jobs number was the market's focus on
Friday. The employment report along with downbeat economic
indicators in the manufacturing and service sectors earlier this
week should ensure that the Federal Reserve's quantitative
easing policy will be in place for some time, analysts said.
"It is likely the debate about QE tapering will be put on
the back burner for now as employment gains look to be losing
momentum," currency analysts at FOREX.com wrote on Friday.
Under QE, the central bank floods the market with cash
through asset purchases, boosting the supply of the currency and
therefore, weakening it. While that may theoretically weaken the
dollar, some portfolio managers said this is not a reason to
abandon the greenback just yet.
"This data interrupts the strong dollar trend against the
euro for example, but medium-term, I am not convinced that this
weakness in the dollar will continue," said Federico Garcia
Zamora, director of currency strategies and senior portfolio
manager at Standish Asset Management in Boston. Standish manages
$167 billion in assets.
"We had expected some softness in the jobs data; after all,
recent reports had been printing weaker-than-expected numbers.
But this is a minor pullback in the U.S. economy and we're going
to see a slowdown in the next couple of quarters and then we
will see growth picking up again in the last quarter of the
year," Zamora added.
U.S. Labor Department data showed that the economy added
just 88,000 non-farm jobs last month, well below the consensus
forecast for a gain of 200,000.
The unemployment rate did inch lower to 7.6 percent from 7.7
percent the previous month, while January and February readings
were revised upward to show that 61,000 more jobs were added.
The euro rose as high as $1.3039, its strongest level
since March 25. It was last trading at $1.3008, up 0.56 percent
on the day. The single euro zone currency was up 1.5 percent so
far this week - on track for its best weekly showing since
"The 61,000 additional jobs (for January-February) were not
sufficient offsets," said Marc Chandler, global head of foreign
exchange strategy at Brown Brothers Harriman in New York.
"Investors have also become more immune to the divergence with
the unemployment rate. The unemployment rate ticked down ... as
almost 500,000 people left the labor market."
Against the yen, the dollar last traded up 1.40 percent at
97.68 yen after earlier hitting session lows at 95.80 yen
following the U.S. jobs report. It hit a new 3-1/2-year high at
Analysts said the main driver for the dollar's moves against
the yen is still the BoJ's monetary stimulus. The greenback was
on track to hit the psychological 100-yen threshold.
"Investors' mindset in trading dollar/yen is to buy it on
dips," said Brian Daingerfield, currency strategist, at RBS
Securities in Stamford, Connecticut.
"We know that dollar/yen will continue to strengthen given
what's going on in Japan and the U.S. payrolls report gave the
market the perfect opportunity to buy it back at a lower level,"
Overall, the greenback was up 12.6 percent against the yen
so far this year.
The euro rose sharply against the yen, rising 1.95 percent
at 127.03. It hit a peak of 127.25, the highest since