By Kevin Buckland
TOKYO, April 10 (Reuters) - The yen sank against major
peers on Monday after U.S. payrolls data bolstered the case for
further Federal Reserve rate hikes, highlighting a growing
disparity with Japan where the central bank continues to pin the
benchmark yield near zero.
Meanwhile, the risk-sensitive New Zealand and Australian
dollars weakened amid heightened U.S.-China tensions over
Taiwan, with Beijing a key trading partner for the Antipodean
nations.
The yen slipped 0.3% against the U.S. dollar to
132.47, extending a similar-sized decline from Friday, when data
showed the U.S. economy continued to add jobs at a brisk pace in
March.
Ten-year Treasury yields reached 3.413% in
shortened trading on Friday for the Easter holiday. The yield
remained elevated at 3.3776% in Tokyo on Monday, when many
markets in Asia as well as Europe will remain closed.
Against the euro , the yen slumped about 0.5% to
144.49. It fell 0.3% to 164.54 versus sterling .
The dollar strengthened against the yen because of the
continued strong growth in the U.S. labour market despite
inflation and sharp interest rate rises, Mizuho analysts
Masafumi Yamamoto and Masayoshi Mihara wrote in a client note.
"Yields in places like the euro area, Britain and Australia
will follow U.S. yields higher, so there won't be a big widening
of the yield gap," they said. "Relative to them, yield spreads
will see a much bigger impact in Japan."
However, the increase in jobs was less than the prior month
and the rise in average hourly wages was less than economists
forecast, which the Mizuho analysts said was not consistent with
a sustained rise in U.S. yields.
Barring an upside surprise in U.S. consumer price data on
Wednesday, the dollar has limited room to rise against the yen
from current levels, they added.
New Bank of Japan Governor Kazuo Ueda takes over from
Haruhiko Kuroda on Monday, and is widely expected to keep
massive stimulus in place for the time being. He will give an
inauguration speech at 7:30 p.m. JST (1030 GMT).
Meanwhile, the New Zealand dollar slumped 0.6% to
$0.6238, and the Aussie slipped 0.21% to $0.6660. Stock
and bond markets in both countries are closed for the Easter
Monday holiday.
The dollar edged 0.12% higher to 6.8830 yuan in offshore
trading .
China began three days of military drills on Saturday
simulating precision strikes against Taiwan, the day after
Taiwan President Tsai Ing-wen returned from a brief visit to the
United States.
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(Reporting by Kevin Buckland; Editing by Jamie Freed)
