Asian currencies and the U.S. dollar held mostly steady on Friday as traders assessed mixed U.S. labor data. The report offered little guidance on the Federal Reserve’s path for interest rates heading into December, leaving markets without a clear direction.
Attention across the region was centered on Japan. Investors were watching a full set of economic indicators, including inflation numbers, trade balance figures, and manufacturing activity.
The U.S. Dollar Index slipped 0.1% after earlier gains this week. Dollar Index Futures also traded 0.1% lower as of 04:24 GMT.
US Jobs Data Offers No Clear Fed Signal
The delayed U.S. September employment report showed nonfarm payrolls rising by 119,000. Meanwhile, the unemployment rate increased to 4.4%. Wage growth stayed soft, with only a modest rise in average hourly earnings.
This mix of stronger headline numbers, weakening labor momentum, and subdued pay growth gave little clarity on whether the Federal Reserve will cut rates in December. MUFG analysts noted that firmer payrolls supported Fed Chair Powell’s view that a December rate cut is “far from assured.”
Across Asia, currency movements were limited. The onshore USD/CNY pair dipped 0.1%, while the offshore USD/CNH was unchanged. The South Korean won’s USD/KRW pair fell 0.3%, and the Singapore dollar’s USD/SGD remained flat. The Indian rupee’s USD/INR pair slipped 0.1%, while the Australian dollar’s AUD/USD saw a slight gain.
Japan Data in Focus: Inflation, Trade, and Manufacturing
With U.S. numbers offering little insight, markets turned to Japan. The latest data provided a mixed outlook for Asia’s second-largest economy.
Core consumer inflation rose to 3.0% in October, remaining above the Bank of Japan’s 2% target. A broader measure excluding fresh food and energy also strengthened. These readings may add pressure on the BOJ to consider a shift toward policy normalization. Even so, officials have stressed the need for stronger wage growth and more stable domestic demand before tightening.
Japan’s trade figures showed a smaller-than-expected deficit in October. Exports increased modestly from a year earlier, while imports also saw a slight rise.
Manufacturing data added caution. The Jibun Bank manufacturing PMI for November ticked higher but stayed below 50, signaling continued contraction in the sector.
The Japanese yen eased slightly, with the USD/JPY pair down 0.2% after touching a 10-month high in the previous session. Finance Minister Satsuki Katayama said Japan may intervene if market moves become excessively volatile or speculative.
