Forex - Dollar up more than 1% against yen as Japan stocks rally

Category: Forex

The dollar rose more than 1% against the yen on Monday as Japanese stocks led a rally in Asian markets, boosted by a robust U.S. jobs report and hopes for additional economic stimulus in Japan.USD/JPY hit highs of 101.95 and was last at 101.91, up 1.3% for the day. The pair had fallen to lows of 99.97 in the wake of Friday’s jobs report.EUR/JPY advanced 1.22% to 112.43.Japan’s Nikkei surged 3.98% after Prime Minister Shinzo Abe’s ruling coalition increased its majority in the upper house in parliamentary elections on Sunday.The win for Abe’s coalition fed hopes for a fresh package of stimulus measures to spur economic growth.Risk appetite had already been boosted after data on Friday showing that the U.S. economy added 287,000 jobs in June, well above the 175,000 jobs forecast by economists.The stronger than expected jobs report indicated that the economic recovery is back on track.But the data did little to alter the view that the Federal Reserve will stick to cautious plans for hiking interest rates after May’s payrolls figure was revised down to 11,000, the smallest monthly increase since 2010.The euro edged lower against the dollar, with EUR/USD slipping 0.2% to 1.1027, not far from Friday’s two-week lows of 1.1001.The pound also slid lower, with GBP/USD easing 0.15% to 1.2933, not far from its post-Brexit low of 1.2794 set last Wednesday.Investors were looking ahead to the outcome of the upcoming Bank of England meeting later in the week.The BoE could potentially ease monetary policy to cushion the U.K. economy from the impact of Brexit, which would also pressure sterling lower.The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.32% at 96.62.