Investing.com - The yen pushed higher against the dollar on Friday after the latest U.S. employment report dampened speculation that the Federal Reserve could raise rates sooner.
The Labor Department reported that that U.S. economy added 209,000 jobs in July, below forecasts for jobs growth of 233,000. The previous month’s figure was revised up to a gain of 298,000 from a previously reported increase of 288,000.
Although it was the sixth successive month that the U.S. economy added more than 200,000 jobs, the unemployment rate unexpectedly ticked up to 6.2% from 6.1% in June. In addition, wage growth was flat, pointing to underlying slack in the economy.
The weaker-than-expected data prompted investors to trim back expectations on the timing of a possible rate hike by the Fed, sending the dollar lower.
USD/JPY was down 0.18% to 102.61 late Friday, after touching session lows of 102.34. The pair still ended the week with gains of 0.84%.
The US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.19% at 81.39 late Friday, off Thursday’s 10-month highs of 81.66.
The greenback had rallied earlier in the week, as strong economic data underlined the view that the recovery is gaining momentum. Official data on Wednesday showed that U.S. economy expanded at an annual rate of 4.0% in the three months to June, outstripping forecasts of 3.0%.
The Fed also upgraded its view on the economy on Wednesday, but reiterated that considerable slack still remains in the labor market.
Elsewhere Friday, the euro edged higher against the yen, with EUR/JPY inching up 0.10% to 137.78.
The euro’s gains were held in check after data on Thursday showed that the annual rate of inflation in the euro zone slowed to 0.4% in July from 0.5% in June.
The weak data added to pressure on the European Central Bank to implement further stimulus measures to shore up growth and stave off the threat of deflation in the currency bloc.
In the week ahead, investors will be awaiting the outcome of Friday’s monetary policy meeting by the Bank of Japan, while Tuesday’s report on U.S. service sector activity 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. The guide skips Monday as there are no relevant events on this day.
Tuesday, August 5
The U.S. is to publish data on factory orders, while the Institute of Supply Management is to release data on service sector growth.
Wednesday, August 6
The U.S. is to publish data on the trade balance.
Thursday, August 7
The U.S. is to publish the weekly report on initial jobless claims.
Friday, August 8
Japan is to release data on the current account. Meanwhile, the BoJ is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The bank will hold a press conference following the announcement.