Investing.com - The dollar retreated from an almost six-year high against the yen on Friday after data showed that the rate of U.S. jobs growth slowed in August, raising the prospect that interest rates will remain on hold at record lows for longer.
The Labor Department reported that that U.S. economy added 142,000 jobs last month, disappointing expectations for jobs growth of 225,000. July’s figure was revised up to 212,000.
The unemployment rate ticked down to 6.1% from 6.2% in July.
USD/JPY fell to lows of 104.70 immediately following the release of the report, before pulling back to 105.08, still down 0.16% on the day. The pair had touched highs of 105.69 earlier Friday, the most since April 2009.
The report eased concerns that the recovery in the U.S. economy is progressing so rapidly that the Federal Reserve will be forced to raise rates sooner prevent the economy from overheating.
Demand for the dollar continued to be underpinned after other reports earlier in the week indicated that the U.S. recovery is still on track. Data on Tuesday showed that the country’s manufacturing sector expanded at the fastest rate in more than three years in August.
The Fed is expected to wind up its asset purchase program in October and to start raising interest rates sometime in mid-2015. In contrast, the European and Japanese central banks look likely to stick to a looser monetary policy stance.
Elsewhere, the yen was trading close to 11-month highs against the euro on Friday.
EUR/JPY touched lows of 135.80 before pulling back to 136.07, to end the session down 0.11%.
The pair fell more than 1% on Thursday after the European Central Bank cut rates to record lows and announced fresh stimulus measures in an attempt to shore up slowing growth and inflation in the euro area.
ECB President Mario Draghi said the decision came after long term inflation expectations deteriorated in August.
In the week ahead, investors will be looking ahead to Friday’s U.S. data on retail sales and consumer sentiment for further indications on the strength of the economic recovery. Tuesday’s Bank of Japan meeting minutes will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 8
Japan is to release data on the current account as well as final data on second quarter economic growth.
Tuesday, September 9
The BoJ is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective. Japan is also to release data on tertiary industry activity.
Wednesday, September 10
Japan is to release data on core machinery orders.
Thursday, September 11
The U.S. is to produce the weekly report on initial jobless claims.
Friday, September 12
BoJ Governor Haruhiko Kuroda is to speak at an event in Tokyo; his comments will be closely watched.
The U.S. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to release what will be closely watched preliminary data on consumer sentiment.