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Sydney - The yen weakened as the Nikkei 225 Stock Average broke above 20 000 for the first time since 2015 following a record close in US equities, sapping demand for haven assets.
Pullbacks in the dollar-yen were shallow and Tokyo sales desks made note of a dilution in corporate sell orders near 111.50, which had capped advances since May 29, according to Asia-based FX traders who are not authorised to talk to the media.
The greenback fell against most of its Group-of-10 peers as traders adjusted their positions ahead of US non-farm payroll data.
"The higher dollar-yen is encouraging a further rally in the Nikkei which started with general risk-on sentiment," according to David Forrester, a foreign-exchange strategist at Credit Agricole CIB in Hong Kong.
"Although a June Fed hike is heavily priced, it’s pretty flat beyond that. Stronger earnings data would lead the market to price further rate rises after June and lead to a more sustainable dollar rally.”
The Treasury curve flattened in Asia after data from the ADP Research Institute on Thursday showed US private payrolls rose 253 000 in May, beating estimates.
US non-farm payrolls probably rose 182 000 in May from 211 000 in the previous month, a Bloomberg survey showed. Fed fund futures based on effective rate put an 88% probability the US central bank will raise rates in June.
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