The yen and the dollar strengthened
as stocks around the world declined before a report likely to show the
U.S. unemployment rate rose to a 26-year high, spurring demand for the
currencies as a refuge.
The dollar was also buoyed after a
Chinese Foreign Ministry official said he was “not aware” of a plan to
discuss a new reserve currency at next week’s Group of Eight meeting.
“If
there’s a disappointing number, the market will take fright and the
dollar may get more support,” said Gavin Friend, a markets strategist
at National Australia Bank in London.
U.S. employers cut 365,000
jobs last month after reducing them by 345,000 in May, according to a
survey of economists before the Labor Department report. The
unemployment rate climbed to 9.6 percent, a separate survey showed.
The
Dollar Index, which tracks the currency against those of six major U.S.
trading partners including the euro, yen and pound, advanced 0.4
percent to 79.946.
The dollar fell yesterday after Reuters
reported that China had asked to debate proposals for a new global
reserve currency at the G-8 summit in Italy. China’s central bank
renewed its call for a new global currency in its 2008 review released
last week, prompting speculation that the country will diversify its
currency reserves.
The yen strengthened versus 12 of the 16
major currencies as stocks declined before the U.S. employment report.
Europe’s Dow Jones Stoxx 600 Index fell 1.3 percent. Standard &
Poor’s 500 Index futures lost 0.5 percent.