TOKYO: The dollar softened in Asia Monday after surging on the back of upbeat US jobs data which stoked speculation of an early pullback on the Fed's monetary easing.
The greenback bought 98.99 yen in Tokyo afternoon trade, down from 99.04 yen on Friday in New York where it had surged from 98.02 the previous day.
A European Central Bank rate cut pressured the euro which weakened to $1.3359 in Tokyo from $1.3368 in US trade and 132.24 yen against 132.40 yen.
The dollar's rising momentum against the yen weakened in Asia as Japanese exporters sold the unit.
"Japanese exporters are selling dollars after the greenback rose above 99 yen, but at the same time buying is strong following the jobs data," said Michiyoshi Kato, senior vice president of forex sales at Mizuho Bank.
Investor sentiment got a boost Friday as the US Labor Department said the economy added 204,000 jobs in October, double what analysts forecast.
The upbeat jobs growth, despite a 16-day partial federal government shutdown, suggested the world's largest economy could be in better shape than previously believed.
That hiked speculation the Federal Reserve would start reeling in its $85 billion-a-month bond buying plan by year's end, a move that would tend to boost the dollar.
The Fed has said any draw down hinged on signs of a firm recovery.
Tachibana Securities market advisor Kenichi Hirano called the dollar's jump on the yen "speculative more than anything else".
"The real yen-weakening story will resume once reliable data come in showing an unmistakable US economic recovery," Hirano told Dow Jones Newswires.
Strong Chinese industrial production and export data has helped lift market sentiment, but the euro remained under pressure as looming deflation fears in the eurozone saw the ECB cut rates to a record low 0.25 percent last week.
A downgrade of France's credit rating also heaped pressure on the unit while an expected tepid result for eurozone GDP this week "will add more weight to the argument for further policy actions", Credit Agricole said.
The dollar firmed against other Asia-Pacific currencies.
It rose to Sg$1.2478 from Sg$1.2438 on Friday, to 31.65 Thai baht from 31.37 baht, to Tw$29.45 from Tw$29.42 and to 63.26 Indian rupees from 62.65 rupees.
It also firmed to 1,071.60 South Korean won from 1,063.38 won and to 43.46 Philippine pesos from 43.24 pesos.
The Australian dollar bought 93.80 US cents from 94.63 cents, while the Chinese yuan fetched 16.25 yen against 16.11 yen.
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