NEW YORK The U.S. dollar broke through 100 yen on Thursday, its highest level against the currency in over four years, while stocks in major markets slipped from recent record levels.
Investors sold the low-yielding yen as support from central banks around the world continued to push cash into higher-yielding assets. U.S. stocks fell slightly after recent gains from a rally that had taken the S&P 500 index to record highs for five straight sessions.
The dollar got support from U.S. data showing first-time applications for unemployment insurance fell last week to the lowest level in more than five years.
"A stampede out of safety and brightening U.S. job prospects helped catapult the dollar over the key triple-digit threshold against the yen," Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, said in a note.
The yen is on track for eight straight months of declines against the greenback, shedding more than 30 percent since its September high near 77. A major stimulus program by the Bank of Japan last month to revive the economy has helped prolong the yen's weakening trend.
U.S. stocks slipped but the recent uptrend remains intact, giving room for declines after the strong climb.
"This market is so stretched to the upside that if we get some little wiggle somewhere, I can easily see us getting back down to 1,580" on the S&P 500, said Stephen Massocca, managing director of Wedbush Equity Management LLC in San Francisco.
Pullbacks in U.S. equities have been short-lived and shallow even as traders have said the market could benefit from a correction. The expectation of continued accommodative monetary policy from central banks globally has sustained support for stocks.
At the close the Dow Jones industrial average .DJI fell 22.5 points or 0.15 percent, to 15,082.62, the S&P 500 .SPX lost 6.02 points or 0.37 percent, to 1,626.67 and the Nasdaq Composite .IXIC dropped 4.1 points or 0.12 percent, to 3,409.17.
The Euro STOXX 50 .STOXX50E index dropped 0.4 percent, retreating from a near two-year high but finding support at an upward trendline from lows hit on April 18. The pan-European FTSEurofirst .FTEU3 closed flat to stay near five-year highs.
The MSCI world index .MIWD00000PUS, which tracks stocks in 45 countries, was down 0.7 percent after earlier hitting its highest level since June 2008.
GREENBACK RISES BROADLY
The U.S. dollar .DXY rose against major currencies almost 1 percent and above its 14- and 50-day moving averages.
The yen closed the session down 1.6 percent at 100.59 per dollar.
The euro was down 0.8 percent at $1.3045 after earlier hitting a high of $1.3177.
The euro was pressured by slightly softer-than-expected demand at a Spanish debt auction, while Spanish government bond yields rose.
Brent crude edged up in volatile trade and U.S. crude settled slightly down, as investors weighed Middle East tensions against weak demand and high inventories.
U.S. oil fell 23 cents to settle at $96.39 a barrel and was down further in extended trading. Brent crude edged up 13 cents to settle at $104.47 per barrel and later dropped 9 cents to $104.25.
Brent has dipped from a one-month high of $105.94 touched on Tuesday after Israeli air strikes on Syria over the weekend stoked supply fears.
"There's a tug of war here; the demand is not going to be there, but the economy is slowly improving," said Mark Waggoner, president at Excel Futures in Bend, Oregon.
Saudi Arabia increased crude oil output by 160,000 barrels per day to 9.3 million bpd in April, industry sources said this week, adding to an already well-supplied global market.
Spanish bond yields rose on speculation Madrid may be planning another bond sale after borrowing costs fell at Thursday's auction of just over 4.5 billion euros of new debt.
The country's 10-year bond yields were 8 basis points higher at 4.195 percent, having moved away from the 2-1/2 year lows of 3.954 percent touched last Friday.
Prices for U.S. Treasuries were flat as investors balanced stronger-than-expected jobs data with expectations that riskier assets such as equities could see a correction soon.
The U.S. 10-year Treasury note yield inched up to 1.811 percent, the highest in nearly a month. The U.S. 30-year bond traded down 5/32 to yield 2.994 percent from 2.987 percent late on Wednesday.
Gold prices fell after the U.S. jobs data, with dollar strength weakening the price further. Spot gold was down 1 percent to $1,456.69. The metal gained 1.4 percent in the previous session, its biggest one-day rise in two weeks.
(Additional reporting by Angela Moon, Julie Haviv, Anna Louie Sussman and Ellen Freilich; Editing by Dan Grebler and Kenneth Barry)