* Yen broadly firmer, led by jump against AUD
* Dollar index ends flat in NY after choppy session
* All eyes still on Fed meeting next week
By Ian Chua
SYDNEY, Sept 13 The yen clung onto broad
overnight gains in Asia on Friday as investors unwound bearish
positions particularly against the Australian dollar, which
suffered a major setback in the wake of disappointing jobs data
Trading in New York, however, was choppy with markets at
first favouring the U.S. dollar as investors reacted to
headlines showing a steep drop in new claims for jobless
benefits last week.
But the greenback then went into reverse gear after the
Labor Department attributed much of the decline in benefit
claims to computer problems in two states.
"So, it looks like the latest data do not reflect underlying
changes in labor market conditions," analysts at JPMorgan wrote
in a note.
That saw the euro erase losses to last stand near $1.3300
, well off a low of $1.3256 plumbed earlier. The dollar
index dipped back to 81.533 from a high of 81.695 as a
The yen, though, outperformed its major peers thanks to a
solid rally against the Australian dollar, which sagged after
surprisingly soft employment figures prompted investors to
quickly price back in the risk of an interest rate cut.
The Aussie fell about 1 percent on the yen to as low as
91.68, before recovering just a bit of ground to last
trade at 92.19. On the week, it was still up 1.3 percent.
Against the euro and dollar, the Japanese currency bounced
off multi-week lows. The dollar fell to 99.56 yen from a
seven-week peak of 100.62, while the euro retreated to 132.38
from a 16-week high around 133.37.
Traders said the big picture is still whether the Federal
Reserve will begin to scale back stimulus at next week's policy
meeting and by how much.
Following last Friday's uninspiring U.S. non-farm payrolls
data, markets are less worried about the risk of any major
pullback from the Fed.
Indeed, many traders and analysts expect the Fed to reduce
its $85 billion monthly bond-buying programme by a modest $10
A much larger number would be seen as hawkish and
undoubtedly provide a boost to the dollar and put emerging
market currencies under renewed pressure. Conversely, any delay
in tapering will be interpreted as dovish, traders said.
Many emerging market currencies, hit hard by an outflow of
funds, have retraced some of their deep losses in recent
"This is likely the result of profit taking, marginally
better China data and investors becoming more sanguine over risk
events next week," said Oliver Harvey, a London-based analyst at
"From here on in, markets should discriminate more between
currencies, particularly if risk remains buoyant," Harvey said,
adding the Indonesian rupiah, Turkish lira and
South African rand remained vulnerable.
There are no major economic data out of Asia on Friday,
leaving the focus on U.S. retail sales due later in the day.