The U.S. Dollar was able to extend recent gains against the Japanese Yen during the Asian trading session following Friday’s release of U.S. labor data which slightly beat analysts’ expectations. According to the press release, private sector jobs increased to 175,000 in May however the unemployment rate moved up fractionally to 7.6%. The numbers were sufficiently improved to encourage investors to buy the greenback following last week’s sell-off which came on the heels of ADP’s labor data release. As reported at 1:15 p.m. (JST) in Tokyo, the USD/JPY pair was trading at 98.12 Yen, about 3.3% higher than Friday’s low of 94.98 Yen, a level which had not been seen in more than two months.
According to strategists, the labor data gives investors a better hint as to what the U.S. Federal Reserve might be inclined to do as regards its current ultra loose monetary policy. Had the labor data been significantly stronger, expectations of the Fed’s reining in some of asset purchases would have increased; as it stands, however, the Fed is likely to continue with its wait-and-see posturing before making any definitive decision. The U.S. Dollar Index, which measures the strength of the dollar against its peers, rose 0.2% to trade at 81.880 .DXY, moving away from last week’s 3-month trough of 81.077 .DXY.