Yen reaches 155.7 level after strong US job report lifts Fed rate expectations

Japanese investors bet on a faster end to ultra-loose monetary policy by the Bank of Japan than anticipated earlier in the week. This increased demand drove the currency up, pushing rates close to levels observed following the July joint US-Japan intervention. The dollar initially surged after the Bureau of Labor Statistics released August nonfarm payroll figures showing a gain of 162,000 jobs. Economists had predicted only 56,000 new positions, while the unemployment rate stayed at 4.1 percent. June and July data were revised upward by a combined 55,000 jobs. Gains were led by food services and drinking places with 62,000 new roles, plus education in local government adding 42,000 positions. Construction saw 22,000 new posts, manufacturing added 16,000, but information sector employment fell. The private-sector workweek averaged 34.4 hours, up by 0.1 hour from the previous period. Market traders reacted by raising the probability of a Federal Reserve rate increase to roughly 59 percent for the September meeting. This adjustment erased much of an initial jump in the dollar.