The yen fell broadly on Thursday after a solid Australian employment report boosted risk appetite, encouraging investors to pick up higher-yielding currencies. The Australian dollar jumped after government data showed net employment increased in December for a fourth straight month and the jobless rate fell to an eight-month low, adding to the case for a further interest rate increase.
"The positive news from Australia has cheered investors, prompting them to seek more risks," said Hideki Amikura, deputy general manager at Nomura Trust and Banking. Traders said the unwinding of positions in commodity currencies triggered by China's move to start tightening monetary policy earlier this week seemed to have run its course.
Gains in Asian shares and US stock futures supported investors in a return to riskier trades, lifting yen crosses and higher-yielding currencies, traders said. The Australian dollar advanced 0.7 percent from late US trade to $0.9297. Traders said the Aussie kept its upward momentum against the US dollar and was likely to extend its gains past the 2009 high of $0.9407 in the near term.
Against the yen, the Aussie rose 1 percent to 85.25 yen after topping the psychologically important 85 yen level shortly after the data was released. The dollar index edged down 0.1 percent to 76.788 with strong support seen around the 100-day moving average near 76.50.
The dollar was up 0.4 percent at 91.73 yen after a fall in the yen against higher-yielding currencies gave a temporary lift to the greenback. The dollar gained more than 0.5 percent against the yen on Wednesday, helped in part by a spike in US Treasury yields.
The euro edged up 0.2 percent to $1.4538 a day after it shot to a one-month high of $1.4580 on trading platform EBS on demand ffrom Asian sovereign entities Traders are watching whether the euro can rise and stay above resistance around $1.4570, a 38.2 percent Fibonacci retracement of its fall from the December high of $1.5142 to the December low of $1.4218.