Forex - Yen gains in early Asia as U.S. jobs data digested, thin trade

Investing.com - The yen gained against the dollar in early Asian trade on Monday with last week's U.S. jobs data expected to weigh in holiday-thinned trade.

USD/JPY traded at 118.94, down 0.02%, while AUD/USD changed hands at 0.7627, down 0.11%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was quoted at 96.86, up 0.02% in early Asia.

Last week, the dollar turned sharply lower against the other major currencies on Friday after an unexpectedly weak U.S. jobs report saw investors push back expectations for a rate hike by the Federal Reserve to the end of the year from midyear.

The Labor Department reported that the U.S. economy added 126,000 new jobs in March, less than half of February’s gain and the smallest increase since December 2013. Economists had forecast jobs growth of 245,000 last month.

February’s figure was revised down to 264,000 from 295,000. The unemployment rate remained unchanged at a six-and-a-half year lows of 5.5%, in line with forecasts.

The surprisingly weak report added to concerns over the outlook for economic growth after other recent economic data pointed to a slowdown at the start of the year.

A slowing labor market could prompt Fed officials to reconsider a planned increase in interest rates. Last month the Fed indicated that the first rate increase could come as soon as June, but added that continued improvement in labor markets would be a key factor it would consider.

The drop in the dollar was exacerbated by thin trading conditions due to the Easter holiday weekend. Most markets in Europe were closed and U.S markets traded for shortened hours.

In the week ahead, markets outside the U.S. will remain closed on Monday. The U.S. is to release what will be closely watched data on service sector activity on Monday and the Federal Reserve is to publish the minutes of its March meeting on Wednesday.

Central bank meetings in Australia and Japan will also be in focus.

On Monday, markets in Australia, New Zealand, China, Europe and the U.K. will remain closed for holidays.

In the euro zone, Spain is to release its monthly unemployment report.

Later in the day, Canada is to publish its Ivey PMI.

In the U.S., the Institute of Supply Management is to release data on service sector activity.