Yen slips on new fiscal year flows, focus on US data

The yen slipped from near a four-year peak against the dollar on Friday as Japanese investors bought fresh foreign assets at the start of the fiscal year in a market otherwise becalmed ahead of key US jobs data.
"Japanese investors' fresh investment is blossoming," said a trader at a major Japanese bank.
"But this will take place only in Asian markets," he said, adding that participants remained focused on the non-farm payrolls data due today.
Japanese investors, frustrated by near-zero interest rates at home and seeking higher returns abroad, are allocating fresh money for the financial year that kicked off on Thursday.
"Japanese investors' buying of dollars won't have a lasting impact," said Yoshiharu Yanagisawa, vice president at State Street Bank in Tokyo.
Traders say the dollar could get bogged down in a two-year-old declining trend - blamed on the gaping US trade deficit and low US interest rates - unless the payrolls data boosts the US economic outlook.
Economists on average say 103,000 more jobs were probably created in March than in February, while some traders forecast a larger figure.
Still, most traders were cautious, as the data has had a habit recently of causing disappointment.
The February payroll data posted a rise of just 21,000 and sent the dollar reeling as it dented hopes for a Fed rate hike in the near future.
The Fed fund rate is at one percent, the lowest level since 1958. Low US rates are thought to have worked against the dollar as they discourage foreign investors from buying US bonds.
Tanase said the Fed was unlikely to consider lifting rates until payroll figures show jobs growth of around 150,000 or more for several consecutive months.
The dollar was around 104.20 yen up about 0.5 percent from late US trade.
Still, it was not far from the four-year low of 103.40 hit on Wednesday while the yen rides high on growing optimism the Japanese economy may be staging its strongest recovery since the bursting of the asset bubble more than a decade ago.
The euro also rose to 128.70 yen from around 128.12 in late US trade, helped by fresh allocations by Japanese.