Dollar hits five-month high against yen

The dollar hit a five-month high against the yen on Monday and steadied against the euro with the help of suspected intervention by Japan to keep the greenback from sliding after Friday's dismal US jobs data.
Dealers said bearish dollar sentiment dominated after Friday's news that the US economy created far fewer jobs than expected in February convinced markets that yield-boosting US interest rate hikes remained a distant prospect.
But suspected selling of yen for dollars by the Bank of Japan (BoJ) kept a floor under the greenback across a range of currencies after its 2-1/2 cent tumble versus the euro on Friday took it down nearly four cents from last week's peaks versus the single currency.
"Ultimately, the activities from Japan are helping the dollar in general," said Derek Halpenny, currency economist at Bank of Tokyo Mitsubishi in London.
"There is still a belief in the market that the BoJ are here or just below here. They have clearly set out on a very determined effort to drive the yen weaker.
"If bids weren't there at 111.00 after the payrolls, dollar/yen would have tumbled. That would have just accelerated the move of dollar selling elsewhere," he said.
At 1300 GMT, the dollar traded at $1.2362 to the euro, steady from the previous New York close and a good distance from Wednesday's three-month high of $1.2056.
On Friday, the disappointing jobs report pushed it down to as low as $1.2432 per euro from session highs around $1.2173. The dollar hit its highest level since late September against the yen at 112.32 yen.
The euro was also near a recent eight month high versus the yen, trading at 138.69.
Japan has spent 10 trillion yen ($89.15 billion) in the foreign exchange markets so far this year, compared with 20 trillion yen for all of last year, a record in itself, in a bid to protect the country's export competitiveness.
Earlier on Monday, BoJ Governor Toshihiko Fukui said that Federal Reserve Chairman Alan Greenspan has not criticised Japan for intervening to slow the rapid appreciation of the yen against the dollar.
"Fukui's comment that Greenspan wasn't critical of Japan's intervention policy suggests the BoJ will continue to intervene," said Mansoor Mohiuddin, chief currency strategist at UBS in London.
The dollar's Friday tumble put a brake on its sharp rise from the mid-February record low against the euro of $1.2927 to $1.2056 last week, leaving investors wondering whether the dollar had more room to gain or whether it would return to a downtrend now.