Forex - USD/JPY extends multi-year gains on strong U.S. jobs report

Investing.com - The dollar soared to highs against the yen not seen since 2009 on Friday after U.S. jobs data far surpassed expectations and fueled talk the Federal Reserve will wrap up stimulus measures that weaken the greenback by design to spur recovery.

In U.S. trading on Friday, USD/JPY was trading at 96.02, up 1.24%, up from a session low of 94.78 and off a high of 96.56.

The pair was likely to find support at 94.78, the earlier low, and resistance at 97.78, the high from Aug. 7, 2009.

The Bureau of Labor Statistics reported earlier that U.S. economy added 236,000 nonfarm payrolls in February, way more than an expected 160,000 jobs and up above 119,000 reported in January.

The U.S. private sector added 246,000 jobs, beating expectations for a 167,000 increase, following January's 140,000 rise.

The headline unemployment rate fell to 7.7% in February from 7.9% in January, beating analysts' calls for the rate to remain unchanged.

The data came after the Department of Labor said on Thursday that the number of individuals filing for initial jobless benefits fell by 7,000 to 340,000 last week, defying expectations for an increase of 8,000 to 355,000.

The numbers sparked heavy demand for dollars on sentiment the Federal Reserve will wind down stimulus programs designed to create job demand by flooding the economy with liquidity to encourage investing and hiring.

The Fed is currently running a USD85 billion monthly bond-buying program known as quantitative easing, which weakens the dollar as a side effect, and Friday's jobs report stoked sentiments that such programs may wrap up sooner rather than later.

Meanwhile the yen continued to come under pressure on sentiments that new leadership at the Bank of Japan will open the door to looser monetary policies.

The Bank of Japan met this week and made no changes to interest rates or to its JPY76 trillion asset purchasing-program at Governor Masaaki Shirakawa’s final meeting before incoming governor Haruhiko Kuroda takes over next month.

Kuroda, a former president of the Asian Development Bank, is a fan of aggressive monetary easing in line with Prime Minister Shinzo Abe, who has long prioritized economic growth over keeping inflation rates in a tight range.

The yen, meanwhile was down against the pound and down against the euro, with GBP/JPY up 0.62% and trading at 143.28 and EUR/JPY trading up 0.39% at 124.79.