Dollar climbs in Asia

The dollar surged to a 3-1/2-year high against the yen on Friday, with the near-term focus on whether US jobs data will fuel hopes for a further recovery in the US labour market. The euro eased versus the dollar but clung to the bulk of the gains made the previous day, when the European Central Bank wrong-footed investors who had positioned for a more dovish signal from ECB President Mario Draghi.
The yen remained under pressure as markets looked past the Bank of Japan's steady policy decision on Thursday to its April meeting, where new leaders are expected to take bolder action to defeat deflation. The dollar edge up 0.6 percent to 95.37 yen. The greenback rose to as high as 95.45 yen earlier, its strongest level versus the Japanese currency since August 2009.
The dollar's surge against the yen at this particular juncture probably caught many market players off guard, said Satoshi Okagawa, senior global markets analyst at Sumitomo Mitsui Banking Corporation in Singapore. "No one had thought such a move would occur before the jobs data...It was sort of like a surprise attack," Okagawa said. Traders said dollar buying by Japanese importers on Friday helped add to the yen's weakness. The focus now is on the US jobs data due later on Friday.
The BoJ is scheduled to hold two policy meetings in April, with the second one to be convened on April 26. If the BoJ expands it monetary stimulus next month that could lead to the dollar trading in the 95-98 yen area or even open the way for a test of 100 yen, depending on how aggressively the central bank eases, said Ronald Ip, Director of Wealth Solutions Group for HSBC Global Markets.
The euro eased against the dollar but clung to the bulk of the gains made on Thursday, when the euro climbed about 1 percent as euro bears covered short positions after the ECB president gave no indication that the bank would cut interest rates further in the euro zone. The single currency slipped 0.1 percent to $1.3092. Against the yen, the euro rose 0.5 percent to 124.88 yen. Sterling, which had gained a brief reprieve after the Bank of England held fire on more economic stimulus on Thursday, fell 0.2 percent to $1.4984. Sterling had hit a 2-1/2-year low of $1.4965 on Thursday ahead of the BoE decision.