The dollar tumbled against the yen after weak U.S. jobs data. The closely watched non-farm payrolls report showed weak job creation in the month of May, far fewer jobs than had been forecast. According to the U.S. Labor department, 69,000 were added to the economy in May, the fewest since May last year and lower that the expected increase of 150,000.
The weak data suggest the U.S. economic recovery is still sluggish and the labor market is faltering. The official unemployment rate ticked up to 8.2 percent from 8.1 percent.
Reasons cited for the weak numbers was due more fundamental weakness in the economy and also due to Europe’s prolonged financial crisis and slowing Chinese growth. This resulted in sluggish U.S. factory activity in May.
The weak job numbers report could cause the Federal Reserve to move closer to introducing another round of quantitative easing (QE3) through bond purchases to stimulate up the economy. This measure usually has a weakening effect on the dollar.
USDJPY plunged to 77.65 with second after the data before recovering to previous levels.