The US dollar rallied as Asian markets opened on Monday, February 6th, following the country’s most recent jobs report which showed that the Federal Reserve could maintain its hawkish stance against inflation for a longer span of time.

Last Friday, February 3rd, the US Labor Department released its much-anticipated employment report, noting that non-farm payrolls were up by 517,000 jobs as of end-January 2023. This was a considerably higher number than the projected gain of 185,000.

Also, the Fed raised interest rates yet again on Wednesday, February 1st, by around 25 basis points. A statement from the agency likewise claimed that it has hit a significant milestone in its fight against inflation.

This resulted in the dollar’s value inching upward, essentially extending its rally. Indeed, the US currency hit a four-week high of 103.22 – a better showing than most global currencies.

What’s Up with the Yen?

Meanwhile, the Japanese yen was affected by rumors that Masayoshi Amamiya, currently deputy governor at the Bank of Japan (BOJ), was in the running to take the Bank’s highest position. The yen plunged to a three-week low of 132.60 to a dollar and, as trading closed, was pegged at 132.35 to a dollar, reflecting a drop of 0.88%.

According to undisclosed sources linked to the Japanese government, Prime Minister Fumio Kishida and his team were in final deliberations regarding the successor of outgoing BOJ Governor Haruhiko Kuroda, as well as two new deputy governors. 

Since 2013, Amamiya assisted Kuroda with monetary policies but remains the most dovish among the candidates for the top post. He played a key role when Kuroda’s asset-buying program was originally drafted and has been one of the strongest advocates for keeping Japan’s extremely low-interest rates. 

In July of last year, however, Amamiya stated that the BOJ needs to start thinking about how it will exit its currently loose monetary policy.

Despite this, many analysts feel that any hope for policy normalization on the part of the BOJ will be dashed if the dovish Amamiya becomes its governor.

How Did Everyone Else Fare?

As of press time, the euro fell by 0.9%, settling at $1.0783. Pound sterling, on the other hand, hit its lowest level since January 6th, settling at $1.203 and down by 0.17%.

The Australian dollar dropped by 0.14% to settle at $0.6912, while the New Zealand dollar fell by 0.33%, settling at $0.6310.