Reuters: US Dollar Report: FOREX- Dollar bounces off 2-mth low against yen, China data hits Aussie

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FOREX- Dollar bounces off 2-mth low against yen, China data hits Aussie Jun 10th 2013, 00:31 Sun Jun 9, 2013 8:31pm EDT * Dollar-yen races up after U.S. job data cheers * Aussie under pressure after China trade data disappoints By Sophie Knight TOKYO, June 10(Reuters) - The dollar resumed its bounce against the yen in early Asian trade on Monday, moving well away from a two-month low plumbed in the previous session, while the Australian dollar slumped after disappointing data from China, its biggest export market. The greenback rose to 98.28 yen, some 3.5 percent higher than a trough of 94.98 hit during volatile trade on Friday as investors scrambled to interpret a highly-anticipated U.S. jobs report. That was the lowest level seen since April 4, when the Bank of Japan unleashed an audacious easing programme that further weakened the yen against the dollar. Treasury yields rose after the report, which showed a slightly better-than-expected 175,000 jobs were created in May, spurring investors to snap up the greenback up after having unravelled their dollar-longs earlier in the week on weak private-sector jobs data. Investors have become fixated on improvements in the U.S. employment situation as it is a condition for the U.S. Federal Reserve to begin winding back its $85 billion-a-month bond buying programme, known as QE3, earlier than scheduled. "The U.S. jobs figures were strong, but not strong enough to increase expectations that the Fed will taper QE3," said Junya Tanase, executive director of forex at JPMorgan in Tokyo. "There was a risk that if the jobs numbers were too strong it would raise the likelihood of the Fed winding down QE3 early, which could lead to a fall in U.S. and Japanese stocks and thereby pull the yen higher. But that was avoided," he said. Japan's Nikkei share average, which has trodden a very similar trajectory to dollar-yen recently, jumped 3.4 percent in early Monday trade as investors adjusted their dollar hedges on purchases of Japanese stocks. Against a stronger dollar, the Aussie dived to a 20-month low of $0.9393 after unexpectedly weak trade data from China over the weekend, with domestic demand also lacklustre. Although the move was exacerbated by very thin trade during a market holiday in Sydney, it reinforced the bearish outlook for the Aussie, which suffered a 7.7 percent drop last month as fears of a lacklustre recovery in China and a surprise rate cut from the central bank weighed. It last bought $0.9424. The New Zealand dollar also dropped 0.4 percent to $0.7851 after touching a near-11 month low of $0.7821 in earlier trade. Support for the Kiwi is said to lie at $0.7808, a low last seen in June 2012, with resistance around $0.7860. Investors are now awaiting the Reserve Bank of New Zealand's monetary policy statement on Thursday, which will be scrutinised for signs of whether the bank is closer to hiking rates to cool the housing market. The Bank of Japan also begins a two-day meeting on Monday, where a change in policy is likewise unexpected, though comments on the recent volatility in Japanese markets are anticipated. Link this Share this Digg this Email Reprints

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