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Yen gets reprieve as dollar dented by private payrolls report


(Reuters) - The yen received some much needed relief on Thursday as the dollar settled back and U.S. Treasury yields moderated after mixed U.S. economic data overnight made investors reduce bets on the Federal Reserve raising interest rates again this year.

Having come off its nearly 11-month high, the dollar index, which tracks the greenback against six peers, held near overnight levels, settling at around 106.55.

The greenback gave up some recent gains after U.S. private payrolls increased far less than expected in September, according to the ADP National Employment Report on Wednesday, although analysts said more evidence was needed to be sure how fast the labour market is cooling.

Longer dated U.S. Treasury yields eased from 16-year highs after the data and remained lower in the Asian day.

"There are some indications that the U.S. labour market is cooling down further" but it's still too early to tell, said Moh Siong Sim, currency strategist at Bank of Singapore, putting Friday's non-farm payrolls under close watch.

"The bigger picture is that the overall U.S. growth has been slowing but it's been slowing slower than expected."

Dollar/yen, which tends to be sensitive to U.S. yields, last traded around 148.53, down about 0.4%.

The yen hit 150.165 on Tuesday, its weakest since October 2022.

The yen's sharp recovery after breaching the 150-line earlier in the week had sparked speculation that Japanese authorities may have intervened to support the currency, but Bank of Japan money market data showed on Wednesday Japan most likely had not intervened.

Finance Minister Shunichi Suzuki on Wednesday declined to comment on whether Tokyo had stepped in, and repeated that currency rates must move stably reflecting fundamentals.

Besides the lower U.S. Treasury yields, the yen also drew support from an overnight drop in oil prices, said Kyle Rodda, markets analyst at Capital.com, though he added that it was likely to be a "short-term reprieve."

Oil prices inched back up on Thursday after an OPEC+ panel maintained oil output cuts to keep supply tight, clawing back some of the previous session's big losses.

The 150-level "is obviously the line in the sand, and the Japanese Finance Ministry will do its best to defend it," but any currency intervention would have very limited effect, Rodda said.

Elsewhere, the euro was up 0.15% at $1.05205, keeping above this week's fresh low of $1.0448.

In a Reuters poll, the median view among 20 analysts on how low the euro will go this month was $1.04, with only one respondent saying the currency would touch parity.


Sterling last traded at $1.2158, steadying from Wednesday's low of $1.20385 per dollar.

The Australian dollar fetched $0.63655, up over 0.6%, while the kiwi was up around 0.5% to $0.59445 against the greenback.

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