Investing.com - The dollar pared gains against the yen on Monday, backing off the more than seven-year peaks hit in the wake of Friday’s strong U.S. nonfarm payrolls report for November.
USD/JPY was down 0.52% to 120.84, off overnight highs of 121.85, the strongest level since July 22, 2007.
The greenback rallied after data on Friday showed that the U.S. economy added 321,000 jobs in November, far more than the 225,000 forecast by economists and the largest monthly increase in almost three years.
The robust data prompted investors to bring forward expectations for the first hike in U.S. interest rates to mid-2015 from September 2015 before the report.
In Japan, data on Monday showed that the economic contraction in the third quarter was deeper than initially estimated.
Revised data showed that Japan’s gross domestic product contracted by an annualized 1.9%, more than the preliminary estimate of a 1.6% decline.
On a quarter-over-quarter basis the economy contracted by 0.5% in the three months to September, compared to a preliminary estimate of a 0.4% contraction.
Another report showed that Chinese exports rose just 4.7% in November from a year earlier, less that held the expected 7.9% increase, while imports fell 6.7% on a year-over-year basis.
The weak data added to concerns over a slowdown in the world’s second-largest economy.
The dollar also trimmed gains against the euro, with EUR/USD at 1.2283, off the more than two-year lows of 1.2248 struck earlier in the session.
The single currency weakened earlier Monday after European Central Bank Governing Council member Ewald Nowotny warned that the euro zone economy is suffering a “massive weakening”.
He added that there is a “high probability” that euro zone inflation would slow further in the coming months, indicating that full blown quantitative easing may be needed.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, dipped 0.10% to 89.29 after hitting peaks of 89.57 earlier in the day, the most since March 2009.