October 3, 2014 / 6:28 AM / 3 years ago

FOREX-Dollar edges up as BOJ's Kuroda endorses benefits of weak yen

* Dollar/yen rebounds on bargain hunting before U.S. jobs data

* BOJ Kuroda: weak yen positive for economy as a whole

* Further upside for dollar seen if jobs data proves firm

* Aussie on track to post rare weekly gain (Adds comments from BOJ governor)

By Shinichi Saoshiro

TOKYO, Oct 3 (Reuters) - The dollar rebounded against the yen on Friday from steep losses overnight, lifted by bargain hunting and comments from the Bank of Japan chief that a weak yen was on the whole positive for the economy.

Bank of Japan Governor Haruhiko Kuroda said the yen’s weakening is positive as long as it reflects the actual state of the economy.

Investors awaited U.S. non-farm payrolls data later in the day for further relief for the dollar, which had fallen from six-year highs as a slide in global equities drove U.S. Treasury yields lower and increased demand for the safe-haven yen.

Earlier in the week the dollar had rallied to a six-year high versus the yen and a two-year peak against the euro on well-set views of monetary policies in the United States and those of the euro zone and Japan diverging.

The dollar rose 0.5 percent to 108.98 yen, coming off the week’s trough of 108.01 hit overnight on bargain-hunting bids, but was still some distance from the six-year peak of 110.09 touched on Wednesday.

“The fact that dollar/yen managed to hold just above 108 encouraged dollar bulls. Whether the dollar is really on an uptrend is still unclear, so buying on dips is a sound strategy for now,” said Bart Wakabayashi, head of forex at State Street in Tokyo.

The dollar was poised to lose 0.3 percent against the yen this week.

The euro fell 0.2 percent to $1.2649 after putting some distance overnight from its two-year low of $1.2571. The common currency was on track to shed 0.3 percent against the dollar this week.

The euro gained on Thursday after European Central Bank President Mario Draghi sounded less dovish than some anticipated, giving no indication of imminent stimulus after the central bank’s policy meeting.

“The euro’s rebound did not look convincing even as Draghi did not sound as dovish as expected. The fundamentals remain unchanged - the ECB is seen being forced to adopt QE (quantitative easing) down the road, while the Fed appears poised to hike rates if conditions allow,” said Junichi Ishikawa, a market strategist at IG Securities in Tokyo.

After a week of mixed data out of the United States, the September nonfarm payrolls data due at 2130 GMT could further fuel expectations of an early rate hike by the Fed.

According to a Reuters poll of economists, nonfarm payrolls are seen coming in at 215,000, a big jump from August.

The Australian and New Zealand dollars also held on to gains won back from the greenback after the U.S. currency’s rally against the euro and yen was halted.

The Aussie fetched $0.8790 after bouncing from a nine-month low of $0.8663 reached earlier in the week. The antipodean currency was on track to rise 0.25 percent this week for a rare weekly gain.

The kiwi traded at $0.7870 after touching a 14-month trough of $0.7708 this week. (Editing by Eric Meijer)

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