Investing.com - The dollar slipped lower against the yen on Monday and edged back from more than four year highs against a basket of currencies, but demand for the greenback continued to be underpinned following Friday’s strong September jobs report.
USD/JPY was down 0.23% to 109.52, off Friday’s highs near six year highs of 109.86.
The US Dollar Index, which tracks the performance of the greenback against a basket of six major currencies, dipped 0.12% to 86.69, not far from Friday’s four year peaks of 86.79. It notched up its twelfth consecutive weekly gain last week, the longest rally since the index was created in 1971.
The U.S. economy added 248,000 jobs in September, the Labor Department reported Friday, well ahead of forecasts for jobs growth of 215,000. The unemployment rate ticked down to 5.9%, the lowest level since July 2008.
The robust data reinforced expectations that the strengthening economic recovery may prompt the Federal Reserve to raise interest rates sooner.
Diverging monetary policy expectations have boosted the dollar against the euro and the yen in recent months with central banks in Japan and Europe likely to stick to a looser monetary policy stance amid concerns over subdued inflation and growth.
The Bank of Japan was to conclude its two day policy meeting on Tuesday and was expected to leave monetary policy on hold, despite a recent slew of weak economic data.
EUR/USD edged up 0.12% to 1.2530, easing back from Friday’s two year trough of 1.2499.
In the euro zone, data on Monday showed that German factory orders fell 5.7% in August, compared to expectations for a 2.5% decline. It was the largest drop since 2009, adding to concerns over the outlook for the region’s largest economy.
The European Central Bank refrained from implementing additional stimulus measures at its meeting last week, indicating that it will wait to see the effects of recent stimulus measures on the region’s economy.