* Dollar/yen supported by Friday's rise in U.S.
* Ichimoku resistance for dollar/yen lies near Y79.27
By Masayuki Kitano
SINGAPORE, Oct 8 The dollar held steady versus
the yen on Monday and hovered near a two-week high hit late last
week after a surprise drop in the U.S. unemployment rate soothed
investor concerns about the U.S. economy's outlook.
The dollar was little changed at 78.68 yen, down from
Friday's high of 78.88 yen hit on trading platform EBS, the U.S.
currency's strongest level since Sept. 19.
The U.S. Labor Department said on Friday that employers
added 114,000 workers to their payrolls last month, while the
unemployment rate dropped to 7.8 percent, its lowest level since
The data prompted some improvement in investors' appetite
for risky assets, but the dollar probably gained a bigger boost
versus the yen on Friday from a rise in U.S. Treasury yields,
said Mitul Kotecha, head of global foreign exchange strategy for
Credit Agricole in Hong Kong.
Still, a substantial move higher in U.S. bond yields from
here seems unlikely, and any gains in the dollar versus the yen
will probably be limited in the near term, Kotecha said.
"The impression I get is just above 79, there is a lot of
sellers out there. The impression we get is a lot of (Japanese)
exporters will be in around that level," he said, referring to
the dollar's outlook against the yen.
Friday's jobs data is unlikely to be enough to convince
market participants that the U.S. jobs market is headed toward a
strengthening recovery, Kotecha added.
According to a quarterly business sentiment survey published
by the Bank of Japan last week, the average dollar/yen exchange
rate assumption that major Japanese manufacturers are using in
their business plans for the six months to March 2013 is 78.97
That suggests that Japanese exporters may want to sell the
dollar if it rises beyond that threshold, although they are
unlikely to be active on Monday, with Japanese markets closed
for a public holiday.
The U.S. Treasury yield rose to as high as around 1.74
percent on Friday, its highest level in nearly two
According to the daily Ichimoku chart, a popular technical
analysis tool, technical resistance against the dollar lies near
79.27 yen. The dollar faces more resistance at its 200-day
moving average near 79.34 yen.
The euro eased 0.2 percent to $1.3010, pulling away
from Friday's two-week high of $1.3072.
A focal point for the euro has been when Spain might make a
request for external aid.
Traders say the euro could get a boost if Spain makes such a
request as that would open the way for the European Central Bank
to buy Spanish debt to help bring down Madrid's borrowing costs.