Dollar falls against yen after weak US jobs data
FILE PHOTO: U.S. dollar banknotes are seen in this illustration taken March 24, 2026. REUTERS/Dado Ruvic/Illustration/File Photo
NEW YORK, Aug 7 : The dollar fell against major currencies including the yen and euro on Friday after data showed U.S. employment unexpectedly declined in July, raising concerns about the economy and how the Federal Reserve may respond with interest rates.
The U.S. economy lost 23,000 jobs in July, Labor Department data showed, compared with economists' expectations for an increase of 80,000 jobs in a Reuters poll.
Data also showed that the U.S. unemployment rate fell to 4.1 per cent last month, pushing the labor participation rate to a near 5-1/2-year low of 61.4 per cent.
The dollar weakened against the yen after the report, shedding gains made in recent days in the aftermath of a historic intervention last week between Japanese and U.S. authorities, which had pushed it to a 13-week low.
It was last down 0.52 per cent to 157.62 yen.
"The big drop that we saw this morning is almost wholly related to the US employment report for July because I think no one really expected non-farm payrolls to be negative or that there would be a big downward revision in the June numbers," said Thierry Wizman, global FX and rates strategist at Macquarie Group.
"I'm inclined to think that the market has shifted the Fed hike into October or December instead of September. That's the main reason for the dollar's decline. The market thinks that the Federal Reserve is going to take into account how tight the labor market is. So anytime you see a print that suggests the U.S. economy is weak or that the labor market is not as strong as otherwise thought, they effectively push out the prospect of a Fed rate hike."
U.S. Treasury yields fell sharply following the report. The 2-year note yield, which typically moves in step with Fed rate expectations, fell 5.19 basis points to 4.193 per cent. The yield on benchmark U.S. 10-year notes fell 2.67 basis points to 4.643 per cent.
Markets are now pricing in a nearly 56 per cent chance that the Fed will hold rates in September, up from 45 per cent a day earlier, according to the CME's FedWatch tool.
The euro was last up 0.31 per cent against the dollar at $1.1559.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.46 per cent to 99.49.
Gold rose as the U.S. dollar fell. Spot gold rose 2.28 per cent to $4,336.09 an ounce.
